Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

ISLE OF WIGHT BILL

Read the Third time, and passed.

Oral Answers to Questions — EDUCATION AND SCIENCE

General Certificate of Secondary Education

Mr. Shersby: asked the Secretary of State for Education and Science if he will make a further statement about preparations for the introduction of the general certificate of secondary education examination.

The Minister of State, Department of Education and Science (Mr. Chris Patten): The programme of preparation for the GCSE is thorough and of high quality. Never before has so much been done to prepare all teachers for examination reform. My right hon. Friend announced on 13 March a series of measures to ensure the successful completion of the training programme and the provision of adequate resources for schools.

Mr. Shersby: Will my hon. Friend assure head teachers that, given the additional training and resources that we have made available, there is time available for

proper planning by teachers, including an agreed syllabus? Will my hon. Friend bear in mind that parents of third-year pupils in my constituency will soon have to choose subjects?

Mr. Patten: I give my hon. Friend that assurance. I know of some of the concern expressed about syllabuses. There is no reason why proper choices should not be made on the basis of the information available, including the national criteria and the draft syllabuses that have been in schools for some months.

Mr. Beith: Is the hon. Gentleman aware that few head teachers or other teachers would recognise his description of the state of preparedness for the GCSE? Does he realise that most parents are not at this stage primarily interested in apportioning blame but are interested in ensuring that their children are properly prepared for the examination? Does the hon. Gentleman agree that postponement has now become a matter for much more serious consideration than hitherto?

Mr. Patten: Postponement of the examination would overwhelmingly lead to the very chaos which its supporters say they fear. Most fair-minded heads and teachers would accept that there has been more preparation for this change than there was for the introduction of the GCE O-levels or CSEs or for the raising of the school-leaving age.

Mr. Pawsey: Will my hon. Friend confirm that the onus for ensuring that this new examination functions effectively is on the shoulders not only of my hon. Friend or his Department, but of teachers and the LEAs?

Mr. Patten: I agree with my hon. Friend. We must make this important change work. I do not believe that we have an option. The Government have shown that they are prepared to play their part. I hope that we can all work to make this new examination the success that it deserves and needs to be.

Mr. Fatchett: Does the hon. Gentleman still not recognise the widespread anxiety and concern among parents? Would it not be a sign of strength rather than of weakness by the Government if they postponed the


examination and allowed proper preparation and proper resources to be devoted to this examination so that those worries and anxieties could at last be eased?

Mr. Patten: Of course I recognise those worries and anxieties. Last week I sat through a debate on this subject at the conference of the Assistant Masters and Mistresses Association. I recognise that many of the anxieties expressed are the result of professional judgments rather than of politics. I do not believe that another option exists. I think that we can and should now work together to make this examination a success.

Mr. Greenway: Is my hon. Friend aware that this morning my right hon. Friend the Secretary of State told the Select Committee on Education, Science and Arts that teacher disruption made the introduction of GCSE less sure? Will my hon. Friend give an assurance that, despite that problem, this important educational reform will go ahead whatever happens, so that parents are certain that their children's education problem is solved?

Mr. Patten: We shall press ahead. I hope that in all the teachers associations and unions wiser counsel will prevail than was shown by some last week. We cannot have a national syllabus determined by the annual conference of the NUT.

Mr. Boyes: Is it not fact that parents, local authorities, teachers and students are concerned about the education system—in fact just about everybody except Education Ministers on the Front Bench. Is it that they simply do not care?

Mr. Chris Patten: That is a ludicrous observation. If that were true, last month the Government would not have announced further phase two training and said that we were prepared to allow schools to close next term for a couple of days so that training could be completed. We would not have made available the £20 million in addition through the education support grant for the extra cost of books and equipment.

Mr. Madel: If certain teacher trade unions continue to refuse to co-operate with the introduction of the new examination, will the Government have contingency plans ready to deal with possible disruption of the curriculum in September? Will it be necessary to ask the Associaton of Chief Education Officers whether it thinks it would be practicable to go ahead with the new curriculum in September?

Mr. Patten: I am afraid that if some of the teacher unions do what they claimed last week they would do, it raises far greater questions than the introduction of the GCSE. In those circumstances we would have to look at contingencies, but I hope that that situation will not arise.

Mr. Radice: We share the Government's support for the new 16-plus examination. Is the right hon. Gentleman aware that not only the teachers but the National Confederation of Parent Teacher Associatons, many local authorities and two out of the five examining groups have expressed strong reservations about the new courses going ahead as planned? Is the hon. Gentleman seriously telling the House that, without more resources and without more adequate preparation, it is fair to next year's fourth-year pupils to start work for the new examination in September?

Mr. Patten: I repeat that we have added to the literally unprecendented preparations which have already been

made and which were agreed in 1984. I see no reason why every teacher should not have received perfectly adequate training by the end of next term. There are no GCE or CSE syllabuses for 1988, and in many cases the machinery which would be necessary to create them has already been dismantled.

Departmental Reorganisation

Mr. Sheerman: asked the Secretary of State for Education and Science whether he has any plans to reorganise his Department.

The Secretary of State for Education and Science (Sir Keith Joseph): Separate information technology and architects and building branches have been established this year on 1 January and 1 February respectively. I have no plans for any further changes in the organisation of my Department.

Mr. Sheerman: Given the variety of educational policies that have been espoused by the Secretary of State, his junior Minister, Lord Young and the Prime Minister, what structure of Department would the Secretary of State advise the Prime Minister to adopt and thus bring a notion of vision, clarity and purpose to a Government who seem to have no educational policy and who are fighting about it after seven years in office?

Sir Keith Joseph: I commend to the hon. Gentleman the policies set out and which are being implemented in "Better Schools". Such policies can be perfectly carried through by the Department of which presently I am the head. There is no need on account of those policies to make any changes.

Dr. Hampson: Will my right hon. Friend initiate a move to end the binary division in higher education, where there is much overlap and duplication and a need for better use of resources? Many of us find it strange that the polytechnics, having increased the proportion of young people going into higher education, now contemplate a massive cut in places.

Sir Keith Joseph: I have to say to my hon. Friend that the report in The Times this morning about a decided cut in polytechnic places is rubbish. There is no need to change the organisation of the Department, of which I am presently the head, in the light of any decisions about binary or non-binary division in higher education.

Dr. Owen: Is the Secretary of State aware that there are many people who believe that the time has come to merge the MSC with the Department of Education and Science, but think that it would be anathema if he were to nationalise the locally provided educational service and would see that as going against the spirit and purpose of the Education Act 1944?

Sir Keith Joseph: There is no intention to nationalise the education service. As the right hon. Gentleman knows, merging one Department with another would be a matter for my right hon. Friend the Prime Minister.

Mr. Patrick McNair-Wilson: Will my right hon. Friend warmly congratulate my hon. Friend the Minister of State on his speech last week? Is my right hon. Friend aware that the belief that there is genuine local control of education is a complete fiction, and will he take urgent


steps to transfer the cost of teachers salaries from local government to the central Exchequer and so take the burden off a handful of ratepayers?

Sir Keith Joseph: In answer to the first part of my hon. Friend's question—yes, enthusiastically. I agree with every word of my hon. Friend's speech. I understand that he has made the same speech in substance several times before, and I am glad that it has received the attention that it deserves. On the last part of my hon. Friend's question—no, Sir.

School Books

Mr. Fisher: asked the Secretary of State for Education and Science if he will make a statement on the level of expenditure on text books in primary and secondary schools.

Mr. Chris Patten: Since 1979 spending per pupil on books has fallen in real terms, as measured by the GDP deflator, while spending per pupil on books and equipment overall has increased substantially. It is for local education authorities and schools to decide on the balance of spending on these items, bearing in mind local priorities.

Mr. Fisher: Is the Minister of State aware that the Prime Minister, in a letter to my hon. Friend the Member for Durham, North (Mr. Radice) yesterday, confirmed the judgment of Her Majesty's Inspectorate that one third of local education authorities have an inadequate supply of textbooks? Is it not an appalling condemnation of seven years of Tory mismanagement of education that children have to share textbooks and so cannot take them home and, in many subjects, are working from textbooks that are out of date? What will he do about it?

Mr. Patten: Unlike the hon. Gentleman, I obviously have the advantage of reading the whole of the letter from my right hon. Friend the Prime Minister to the hon. Member for Durham, North (Mr. Radice), rather than just part of it. My right hon. Friend pointed out that Her Majesty's Inspectorate had found that the proportion of books and equipment was satisfactory in over two thirds of the local education authorities, and in only one tenth of schools was inadequate capitation judged to be the cause of shortage.

Mr. Willie W. Hamilton: Does the Minister recognise that if there is a chronic shortage of textbooks throughout the education system we are in danger of creating the "yob society" about which he talked, which is already in evidence at the Federation of Conservative Students?

Mr. Patten: That would have been a more impressive supplementary question if the hon. Gentleman had listened to my earlier answer. In its report the HMI noted that provision for books in schools has improved each year since 1981. It also noted that inadequate identification of needs and poor departmental management were a more common cause of shortage of books and equipment than low capitation.

Burnham Committee

Mr. Chope: asked the Secretary of State for Education and Science whether he remains satisfied that the representation of the teaching unions on the Burnham committee is pro rata to the size of membership of those unions.

Mr. Haselhurst: asked the Secretary of State for Education and Science whether he will institute a biennial review of the composition of the Burnham committee teachers' panel; and if he will make a statement.

Sir Keith Joseph: I am satisfied that the representation of the teacher unions on the Burnham primary and secondary committee reflects the Burnham-relevant membership of the teacher unions as at 31 December 1984, which is the latest date for which figures are available for all the unions. I do not think that it would be appropriate to consider another review until the independent panel recently appointed by the Advisory, Conciliation and Arbitration Service to assist management and teachers in negotiations on various matters, including procedures for negotiation, has completed its work.

Mr. Chope: Is my right hon. Friend aware that tens of thousands of moderate teachers who put pupils before politics are leaving the NUT, and have been since 1984, and are joining the Professional Association of Teachers and the AMMA? Should not those changes be reflected without further delay in the composition of the Burnham committee?

Sir Keith Joseph: I am unwilling, at a time when there is widespread agreement that the Government should consider shifting from the present Burnham committee arrangements for negotiations—although without much agreement on what the shift should be towards—to confirm the durability of the Burnham committee by reviewing teacher numbers. After all, the only arrangements for the audited collection of numbers is at the end of the year, so the latest numbers available would be at the end of 1984, and, soon, 1985. It will be time enough to consider this when ACAS has reported.

Mr. Haselhurst: Will my right hon. Friend not altogether exclude the possibility of a further review, and not confine that review simply to a pro rata arrangement, but consider the more revolutionary approach of according equal representation to all the teacher unions? That might reflect a better balance and better working within the Burnham system.

Sir Keith Joseph: I certainly do not want to rule out the possibility of a review in a suitable form at a suitable time. I therefore heed what my hon. Friend says, but without necessarily espousing his last suggestion.

Mr. Flannery: Is it not true that the problems of education will remain huge and will continue to move towards the centre of the political stage, no matter how much gerrymandering is done with the Burnham committee? As the right hon. Gentleman moves the goalposts on the Burnham committee, are not teachers going back to work embittered and angry because they realise that the Government are interested not in state education but only in private education? The Government care not for the education of the children, whom we believe should be educated to the best possible standard.

Sir Keith Joseph: The hon. Gentleman is mischievious in his suggestions and entirely unjustified. Let him read "Better Schools" to see the practical interest of the Government in the improvement of standards in state education. The only power that I have used in reviewing the membership of the Burnham committee was given to the holder of my office by statute by a Labour Government.

Mr Madden: When will the Secretary of State respond to the calls of those on the Burnham committee and elsewhere in education, and resign?

Hon. Members: Answer.

Sir Keith Joseph: I think, Mr. Speaker, that that was a rhetorical question.

Privatisation

Mr. David Atkinson: asked the Secretary of State for Education and Science what recent representations he has received in support of legislation to privatise educational services; and if he will make a statement.

The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): There have been many responses to the Government's consultative paper on compulsory competitive tendering by local authorities issued in February 1985. The Government remain committed to the principle of requiring local authorities to submit certain of their in-house services to the discipline of competitive tendering against outside private contractors and are preparing the necessary complex measures for inclusion in the legislative programme as soon as is practicable.

Mr. Atkinson: Does my hon. Friend agree that the demand for private and independent education in this country has never been higher? Will he now consider introducing new incentives to satisfy that demand? Does he agree that the alarming expressions of teacher power over the Easter weekend will serve only to encourage those who believe that the privatisation of state education services is now due?

Mr. Dunn: As the House knows, the Government continue to consider all possibilities for improving school education. We also take the view that the greater the variety available to all parents, whether in the maintained or the private sector, the better for the future well-being of the country.

Mr. Bell: May I commiserate with the Secretary of State for being described in today's Daily Telegraph as
the most misunderstood man in British politics"?
We welcome the fact that there are no privatisation plans for the polytechnics. May we nevertheless have an assurance that the proposals announced yesterday by the National Advisory Board, as they affect Teesside, Newcastle and Sunderland polytechnics will be set aside after counter-proposals have been made to the Department, whether they are privatised or not?

Mr. Dunn: I congratulate the hon. Gentleman on the ingenuity of his supplementary question, but it has no relation to my hon. Friend's original question.

Mr. Stern: Does my hon. Friend agree that, in view of the Government's wholesale success in privatisation across Government Departments, the privatisation of existing schools should not be ruled out?

Mr. Dunn: I am certainly prepared to consider any schemes along the lines suggested by my hon. Friend, but I must point out that we are concerned about privatising educational services and that many of the least efficient local authorities are the least interested in increasing efficiency. That is why the Government propose to take this step.

Mr. Canavan: As education should be a right for all and not just a commodity to be bought and sold in the market place, may we have a categorical assurance that the Government will reject the crazy proposals of some of the Right-wing extremists in the Tory party and also, apparently, Mr. John Pardoe of the Liberal party, who want to take education out of the hands of elected local education authorities and contract it out to private agencies and private schools? That will be the surest way of creating the type of "yob society" to which the Minister of State referred during his speech last week.

Mr. Dunn: I feel that the hon. Gentleman is in danger of not understanding the debate about the future of the education service. His rather crazy and convoluted question does not deserve an answer from me.

Teachers' Dispute

Mr. Chapman: asked the Secretary of State for Education and Science if he will make a statement about the situation in schools, following the declared end of the teachers' industrial action.

Sir Keith Joseph: Following the 1985 pay settlement and the opening of talks led by the ACAS appointed panel, many teachers have returned to full normal working, but I am sad to say that disruption has continued in many schools in England and Wales. Such disruption is even more indefensible now that talks covering pay, structure, duties and responsibilities are taking place.

Mr. Chapman: I welcome the belated agreement to the 1985 pay settlement at a level ahead of inflation. Does my right hon. Friend agree that any long-term solution must not only consider improved pay and promotion prospects for teachers, but must include an unequivocal definition of teachers' responsibilities and some sort of performance assessment? Does my right hon. Friend also agree that any disruption in the schools before these talks are concluded, or any attempt by any union to dismiss certain parts of what must be a total package; will be vigorously objected to not only by parents but by the public at large?

Sir Keith Joseph: I think that what my hon. Friend has formulated lies within the agreement reached by ACAS with the local education authorities and with at least five of the teacher unions. The National Union of Teachers, to a certain extent ambiguously, is associating itself with the talks.

Mr. Weetch: My question refers to the abiding situation in schools. Does the Secretary of State realise that one of the deplorable features in state schools is the increasing level of violence outside and inside the classroom against members of the teaching profession? Has the Secretary of State received a report from the NAS/ UWT on the appalling level of violence against teachers in some parts of the country? Has he considered it, and if not, will he consider it carefully and consult local education authorities as to ways in which this deteriorating situation can be dealt with?

Sir Keith Joseph: Yes, I have received such a report. I share anxieties about it. I have to point out that although the subject has validity, the report represents a 3 per cent. response to an inquiry by the NAS/UWT of its members. Nevertheless, I do not doubt that violence takes place and


is enormously to be regretted. I take the view that a good head teacher makes a huge difference to a school. I shall certainly study the report and anything that might be done seriously.

Mr. Lord: Is my right hon. Friend aware that in some schools in my constituency of central Suffolk no homework is being set, some pupils have had only one school report in three years, and many pupils are now having to decide on their state examination options without their parents having had any consultations with the teachers who will be teaching them throughout that period? Does my right hon. Friend agree that the teachers concerned in this action must be well aware of the permanent damage that they are doing to the children and that they ought to be made to carry out at least those basic duties?

Sir Keith Joseph: I share entirely the reaction of my hon. Friend. I have time and again paid tribute to those teachers, including head teachers, who, despite every pressure, have not responded to the encouragement to disrupt from some teachers' unions. I deplore the disruption that some teachers' unions have encouraged their members to take. It is entirely wrong that pupils should be penalised, and I agree with my hon. Friend. The employers—the local education authorities—must consider their reaction to the behaviour of such teachers.

Mr. Evans: Can the Secretary of State confirm that the sensible agreement reached between the Scottish Office and the Scottish teacher unions has made his task of trying to reach a sensible agreement with the English and Welsh teachers' unions almost impossible? Will he guarantee that no matter what ACAS recommends in its inquiry into the dispute, he will accept it?

Sir Keith Joseph: I cannot give that assurance to the House. The Government have said that they will seriously consider any recommendations that emerge from ACAS. The hon. Member must realise that the position in Scotland was not paralleled in England, where the ACAS initiative has broken the deadlock.

Mr. Key: One tragic side effect of the dispute is the loss of contact time out of school between the teaching profession and pupils. Is the Secretary of State satisfied that this is, therefore, a good time to deregulate Sunday trading, when that might lead to pupils having less time for school preparation? The teachers unions are extremely worried about that. Will he ensure that there is no unfortunate educational side-effect to this measure?

Sir Keith Joseph: I congratulate my hon Friend on introducing his views on Sunday trading into this question. I cannot accept that, whatever happens to Sunday trading, it will have the result that he fears.

Mr. Radice: Is the right hon. Gentleman aware, after four and a half years as Secretary of State, and after seven years of Conservative Government, that even Ministers acknowledge that our schools are in a crisis? As he is an honest man, will he accept that when the contenders for the succession so publicly and obviously submit their competing job applications, and when he has so clearly lost the confidence of parents, teachers and local authorities, the time has come for him to stand aside and allow someone else to clear up the mess?

Sir Keith Joseph: I welcome the hon. Gentleman's acknowledgement earlier that the Opposition agree with

the Government that the new GCSE examination should be introduced. A by-product of the present tragic state of schools is the fact that all parties in the House acknowledge that higher standards in the state education service are greatly to be desired, for the benefit of children and the country as a whole. I hope that, out of that general recognition, much good can come from the present misery.

Mr. Fallon: Is my right hon. Friend not constantly amazed at his tolerance and patience? If the NUT now demands a veto on what its members will teach and when they will teach it, has not the time come to scrap the Burnham machinery and introduce legally enforceable contracts between teachers and employers?

Sir Keith Joseph: I need no persuasion that it may be sensible to abolish the Burnham machinery. I need to know what might suitably and appropriately take its place.

Schools (Midday Supervision)

Mr. James Lamond: asked the Secretary of State for Education and Science whether he is satisfied with the arrangements of local education authorities in giving effect to section 2 of the Education (Amendment) Act 1986.

Mr. Litherland: asked the Secretary of State for Education and Science if he is satisfied with the arrangements made by local education authorities for training supervisors for midday supervision as a result of section 2 of the Education (Amendment) Act 1986.

Mr. Greenway: asked the Secretary of State for Education and Science if he will make a statement on lunchtime supervision in schools.

Mr. Thurnham: asked the Secretary of State for Education and Science how many local authorities have not yet sought additional funding for lunchtime supervision for schoolchildren.

Mr. Chris Patten: Sixty five local education authorities in England have submitted bids or draft schemes in application for education support grant for midday supervision. Thirty two LEAs have yet to submit a scheme, although 26 of these have made informal inquiries of the Department. Forty nine LEAs have had their proposals approved. This represents satisfactory progress in the short time since the Education (Amendment) Act 1986 came into force. It is for LEAs to make their own arrangements for training supervisors.

Mr. Lamond: Does the Minister realise that the plain truth about the midday supervision scheme is that it is grossly underfunded, and was introduced without adequate consultation? It is causing great concern to parents throughout the country, including those in my constituency. Should he not grasp the nettle now and introduce a national plan, which would at least prevent an unmitigated disaster, even by the pathetic standards of his own lame duck Department?

Mr. Patten: I am delighted that the Oldham local education authority has submitted a scheme, which we have been able to approve, subject to certain inquiries on our part. That represents good progress. But I fear that if we had suggested a national plan we would have been accused of centralisation, and that really would not do.

Mr. Litherland: Does the Minister not agree that a national scheme would be more beneficial and would give


equal supervision to all children? If the scheme is left to local education authorities, what confidence can parents have that the supervisors will be adequately trained and will have the necessary experience?

Mr. Patten: This is an issue for local education authorities, and I hope that the hon. Gentleman's constituents will have every confidence in the scheme submitted by the Manchester local education authority.

Mr. Greenway: Is it not scandalous and dangerous that children should be locked up in schools during lunchtime? Is not the Act, and the way that it is working, to be welcomed? Is my hon. Friend aware that some head teachers are concerned that assistant teachers operating the scheme may earn more than they do, and that that is why they have some reservations? Will he look into that possibility and ensure that it does not arise?

Mr. Patten: I understand what my hon. Friend has said. We want to see that head teachers are paid properly for the responsibility that they carry. That would, of course, have been one of the consequences if the teachers associations had accepted the 12 September package.

Mr. Thurnham: What action can be taken in the case of those head teachers who are not co-operating in making the new arrangements work?

Mr. Patten: It is more a question of encouraging the remaining local education authorities to put in bids for schemes. I very much hope that all head teachers will help to make the arrangements work. I know how hard head teachers have had to work during the past year, and we greatly admire the way in which they have carried their burden.

Mr. Flannery: Why does the Minister not admit to something that no one knows about? Why does he not tell the House that the £40 million is not only not enough, but is taken out of the £1·25 billion being offered to the teachers, which is in itself inadequate? Ministers never tell people where the money is coming from.

Mr. Patten: As a matter of interest, both the public and the teachers, in particular, were told that on 5 August 1985.

Sir Kenneth Lewis: Is my hon. Friend aware that I and many teachers and parents are convinced that teachers make the best supervisors? They should be encouraged to pick up the extra money and to supervise school meals. The only thing stopping them is the NUT, in particular, and some of the other unions.

Mr. Patten: I do not think that only teachers can supervise at lunchtime, but some local education authorities are introducing schemes involving teachers. We have made it clear that teachers should carry out such duties on a contractual basis.

Mr. Andrew F. Bennett: Why did the Government not heed the Opposition's warning that there should he national standards for midday supervision and a basic training scheme? Does the Minister agree that he has now offended the National Association of Head Teachers as a result of his proposal? Have we not seen yet another example of the Government's determination to offend everyone involved in education, and to cause as much difficulty as possible?

Mr. Patten: No.

Mr. Couchman: Is my hon. Friend aware that both parents and governors are writing to us suggesting that some schemes put forward by local education authorities propose an inadequate level of supervision? Will he ensure that when he approves schemes he takes careful account of that so as to reassure parents and parent governors?

Mr. Patten: I can certainly give my hon. Friend that assurance.

Mr. Dixon: asked the Secretary of State for Education and Science when he last met the National Association of Head Teachers to discuss the implementation of the Education (Amendment) Act 1986.

Mr. Chris Patten: My right hon. Friend met the NAHT on 3 January. I met the NAHT myself on 28 January. My right hon. Friend and I are always willing to discuss matters of common concern with the teacher unions, although no date has been set for a further ministerial meeting with the NAHT.

Mr. Dixon: Is the Minister aware that the National Association of Head Teachers, 16 counties and 24 metropolitan district counties, including my district council of South Tyneside, have suggested that there should be a national plan for midday supervision? Why does the hon. Gentleman not listen to them? How does he propose to ensure that children are properly and equally supervised?

Mr. Patten: That is the general view of local authorities. I am delighted that South Tyneside local education authority was one of the first to apply for help under the education support grant. We acted in the Education (Amendment) Act 1986 to deal with a longstanding grievance. I am surprised that the hon. Gentleman and others are criticising us for doing so.

Science Budget

Mr. Soames: asked the Secretary of State for Education and Science what recent representations he has received on the size of the 1986–87 science budget.

The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden): My right hon. Friend has received 193 representations about the resources available for science. These representations relate generally to the Government's plans for science funding over a period of years rather than to the budget for a specific year. The Government's plans for the science budget will be reviewed during the annual public expenditure survey.

Mr. Soames: Is my hon. Friend aware of the very great concern felt in all parts of the House that if we are to compete with the Japanese and United States of America we must spend a great deal more money on civil research and not so much on military research? Does he agree that we should have a national policy, and will he take steps to move towards that?

Mr. Walden: There is a standing case for spending more on science, as there is in many other areas, but it is a question of priorities. It is a question of getting the money first and of making sure that that money is well spent. In that connection, I should like to pay tribute to the considerable efforts made by the research councils to rationalise the way in which money is spent. But it is not


just a question of the Government spending money; industry, too, should spend more on research and development. Pointing to the fact that British business spends less on research and development than any other Western economic competitor, and to the fact that our wage increases are higher by far than those of any other economic competitor, my right hon. Friend recently described that as "a suicide pact".

Mrs. Renée Short: Does the Minister accept that one of the major criticisms of his Department is that resources for teaching and research in science are not adequate? Is it not nonsense that in industrial areas we should be closing down science departments in polytechnics? What will he do about that? Does he not think that a Minister for Science should be appointed?

Mr. Walden: My right hon. Friend earlier described the so-called cuts in polytechnics as rubbish. I do not think I can do better than that. I am sure the hon. Lady knows that it would be wrong to lend her name to a campaign of alarmism about so-called cuts in polytechnics. [Interruption.] I am chairman of the relevant committee of the NAB, which has made no such recommendation for cuts; has my right hon. Friend. He will be considering in the normal way at the end of the year, in the first round, the amount of money available for expenditure in the public sector of higher education.

Sir Anthony Grant: Is my hon. Friend aware that in Cambridge at least there are definite signs of a brain drain, which could be resolved by the expenditure of a relatively small sum of money? Will he and his colleagues fight the Treasury on this much more vigorously in the future than in the past?

Mr. Walden: My hon. Friend makes a point to which we are devoting considerable attention. We are awaiting a report from the Royal Society on the brain drain. We also listen carefully to the representations from the "Save British Science Campaign", which includes many distinguished men and women.

General Certificate of Secondary Education

Mr. Weetch: asked the Secretary of State for Education and Science what are his latest estimates of the cost of introducing the general certificate of secondary education examinations.

Mr. Chris Patten: The Department is contributing more than £9·5 million to the national programme of in-service training for the GCSE. We have also proposed devoting £20 million expenditure, supported by education support grant, to books and equipment for the GCSE. It is not possible to draw up precise estimates of local education authority expenditure, but the general criteria for the GCSE provide that syllabuses and methods of assessment should not make unreasonable demands on resources.

Mr. Weetch: I am grateful to the Minister for that answer. Is he aware that one of the issues on which confidence has been lost in the teaching profession and among parents is the utterly inadequate level of funding of the examination? How has the £20 million figure been reached? Are there any detailed costings which will be subject to public scrutiny? When will any of the money be made available to the examination groups?

Mr. Patten: The money will be made available during the next financial year— it should be available by the second half of the academic year. As for the assessment of how much money we should make available, we took account of what was already being provided through capitation and what we could afford on top of that.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. McKelvey: asked the Prime Minister if she will list her official engagements for Tuesday 8 April.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with the President of Kiribati. In addition to my duties in this House I shall be having further meetings later today. This evening I shall be presiding at a dinner for the President of the Republic of Korea.

Mr. McKelvey: Does the Prime Minister endorse the actions of "Rambo Ronny" who, at this very moment, is exploding a nuclear device in the Nevada desert? Does she agree that that is against the spirit of world peace? [HON. MEMBERS: "Reading".] If the Prime Minister is in favour of a comprehensive test ban treaty, will she say so? Will she—[HON. MEMBERS: "Reading".]—further assure the House that this test is not in any way connected with the present British Trident programme?

The Prime Minister: I have seen press reports on the prospective test. As a nuclear power, we understand the reasons for nuclear testing. It is not possible to have a comprehensive test ban treaty until methods of verification have cleary been worked out.

Mr. Robert Atkins: Has my right hon. Friend seen—[HON. MEMBERS: "Reading".]—a copy of this document, which I have in my hand, which purports to be guidelines for members of governing bodies in secondary schools and which seeks to destabilise, damage and destroy the relationship of head teachers with governors and children in schools? The document is circulating in the north-west of England. Will my right hon. Friend do what she can to publicise to head teachers, governing bodies and parents the nature of this insidious and seditious paper, which is put out by the extreme Left-wing of the Labour party?

The Prime Minister: I have seen today the report of that document in The Times. I agree with my hon. Friend. The document should be compulsory reading for everybody. It shows how the extreme Left really works.

Mr. Willie W. Hamilton: asked the Prime Minister of she will list her official engagements for Tuesday 8 April.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Hamilton: Has the Prime Minister ever known a time when the education system as a whole was in such a chaotic mess and when morale among all sections involved, whether parents, teachers, students or university lecturers, was so low? When will the Government understand that massively increased investment in this area would be the wisest possible decision that the nation could make now?

The Prime Minister: I hear what the hon. Gentleman says and, of course, disagree with most of it.
I fear that those whose only answer to these problems is to call for more money will be disappointed … The challenge in education is to examine its priorities and to secure as high efficiency as possible by the skilful use of existing resources.
That is what the last Labour Prime Minister, the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), said in a speech at Ruskin college. I agree with him.

Mr. W. Benyon: In view of the recent appalling events in Protestant Loyalist Ulster, has not the time come when we should reconsider very carefully the expenditure of lives and money to keep Ulster within the United Kingdom?

The Prime Minister: I share my hon. Friend's view about the recent appalling events in Ulster, when the police have been attacked in a terrible way, which all of us should utterly condemn. I think that we must carry on with the Anglo-Irish accord and do our best to try to restore some peace and stability in the Province. We really must call upon all decent Unionists utterly to condemn this kind of activity and to do their best to see that no more of it occurs.

Mr. Kinnock: First, may I completely endorse the Prime Minister's last answer and express the hope that the message goes to all parts of the community of Northern Ireland so that they will comprehend the determination, jointly shared in this House, to see that the agreement is upheld in peace as a way to peace.
When our country's future depends so obviously and so heavily on technology and trade, where is the sense, the efficiency or the justice in making further cuts in polytechnic degree courses in civil engineering, the sciences and modern languages? Would that not be a desertion of the national interest? Would it not be a further action by a yob Government?

The Prime Minister: The number of places in polytechnics in 1986–87 will be 172,000, an increase of 43 per cent. over the number in 1979, which remained static under the Labour Government. As for trying to get more scientific courses in both universities and polytechnics, an extra £43 million has been made available by the Government to get the courses which industry requires. Industry has contributed another £24 million towards those courses. That augurs well for future co-operation between universities and polytechnics and industry.

Mr. Kinnock: If the position is as the Prime Minister describes, why is it that her own National Advisory Body and the Committee of Directors of Polytechnics say that they cannot make any further cuts without destroying the quality of provision in all the subjects that she mentioned? Will she heed the words of her own Green Paper last year on higher education, which acknowledged that if present trends continue we shall fall even further behind our competitors in engineering and technology?

The Prime Minister: I saw the right hon. Gentleman sitting in his place when I heard my hon. Friend the Member for Buckingham (Mr. Walden), the Parliamentary Under-Secretary of State for Education and Science, who is chairman of the National Advisory Body committee utterly repudiate that report. [HON. MEMBERS: "Not true."] He should know, because he is the chairman.

Mr. Kinnock: In that case, was the dispatch of a letter from the National Advisory Body committee to the directors of the polytechnics a mistake, or did it not take place, or is it another fantasy?

The Prime Minister: It was not a committee. It was a secretariat. The National Advisory Body will not submit formal recommendations about academic provision in particular polytechnics in 1987–88 until September. In the meantime, I repeat that this Government have an excellent record in the provision of science courses in polytechnics.

Mr. Baldry: Does my right hon. Friend agree that this House will not countenance intimidation from the Loyalist community in Northern Ireland, any more than it would countenance it from the IRA? Does she agree that it does not lie in the mouth of any person who attacks anyone who wears the Queen's cap badge to call himself a Loyalist?

The Prime Minister: I agree with my hon. Friend that terrorism and violence must be condemned equally, no matter from what quarter in Northern Ireland they come. I am sure that the police will uphold their duty totally impartially and will not be intimidated by terrorism.

Mr. Steel: Will the Prime Minister explain to the House how it is that, when Sunday trading was not in the Conservative manifesto at the last election, the Government are intending to introduce the Bill to this House next week on a three-line Whip? Should there not be some issues left to a conscientious free vote of the majority of Members of this House?

The Prime Minister: The right hon. Gentleman will remember that we have had the Auld committee report, that it made a full report on Sunday trading, that the Bill has been through the other place and that it will shortly be coming before the House. He knows that whipping is never decided until much nearer the time.

Sir Eldon Griffiths: Referring to Northern Ireland, does my right hon. Friend recall that long before Portadown, when we were debating the Northern Ireland agreement, I asked in the House for an assurance that, in the event of the police needing protection for their families, that protection should be provided? As Ministers promised it and it did not materialise until the petrol bombers struck, does my right hon. Friend not understand that that is why there is among the rank and file of the Royal Ulster Constabulary a great measure of dispiritment at the present time?

The Prime Minister: I understand what my hon. Friend is saying, and I know he will agree with me that we have great admiration for the RUC, for the totally impartial way in which it carries out its duties. My right hon. Friend will take every action he possibly can if any further action is required to see that the families of the RUC are protected.

Mr. Sheerman: asked the Prime Minister if she will list her official engagements for Tuesday 8 April.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Sheerman: Will the Prime Minister have time today to look at the chorus of criticism of her Government's educational policies? Her Government have been in power now for seven years, yet at this time her Ministers are publicly both confused and divided about the


educational policies of her party and her Government. When will she do something to put at rest the minds and hearts of parents and deal with the confusion and chaos that exist in our classrooms today?

The Prime Minister: This Government have committed substantial resources to education. Indeed, expenditure per pupil is up by 16 per cent. in real terms and pupil-teacher ratios are at their best-ever levels. So resources and increasing numbers of teachers have been provided. I agree with the hon. Gentleman that many of us are shocked at the action that some of the teachers have taken recently. It is not befitting any profession, let alone a profession which expects, and should expect and enjoy, a good deal of prestige.

Mr. Holt: Does my right hon. Friend agree with me that most of us woke up this morning to a marvellous fillip on hearing of the launching of HMS Coventry? Does she agree, further, that the management of Swan Hunter has shown that it is leading a marvellous shipyard in the northeast, and does this not augur well for the order for the new auxiliary oil replenishment vessel going to that region?

The Prime Minister: Strenuous and successful efforts were made to ensure that the frigate HMS Coventry was launched on time, and I congratulate all concerned. I have nothing further to report on the order which two shipyards are hoping will come to them. Further inquiries are being made to ensure that the figures about competition are fair, because that is vital to both shipyards.

Mr. Stott: asked the Prime Minister if she will list her official engagements for Tuesday 8 April.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Stott: The Prime Minister is no doubt aware that in a letter replying to my hon. Friend the Member for Durham, North (Mr. Radice) she admitted that reports by Her Majesty's inspectors of schools indicated that at least one third of local education authorities in this country were vitally short of textbooks for the education of our children. Is that not an appalling record for someone who has been the Prime Minister of Britain for the last seven years?

The Prime Minister: If the hon. Gentleman reads that report in full he will find that a good deal of the problem is due to bad management of the resources. He has heard about the tremendous extra resources that the Government have made available per pupil for education. Expenditure per pupil is up by 16 per cent. over and above inflation and pupil-teacher ratios are at their best-ever level. With increasing resources per pupil, and an increasing number of teachers compared with pupils, there is good reason to expect that, if those resources are properly managed, education will be at a high standard.

Viscount Cranbourne: Will my right hon. Friend take time today to tell the House whether, in her opinion, there would have been an Anglo-Irish agreement if there had riot been an IRA terrorist campaign?

The Prime Minister: There is an Anglo-Irish accord, and it must be implemented. It is intended to bring peace and stability to Northern Ireland. Obviously that requires the goodwill and active co-operation of decent men and women on both sides of the community. As Burke said, all that is required for evil to triumph is that good men do nothing. Now is the time for good men on both sides of the community to make their views known.

Mr. Redmond: asked the Prime Minister if she will list her official engagements for Tuesday 8 April.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Redmond: What monetary price does the Prime Minister put on the pain and suffering of people who are waiting to go into hospital? Will the Government cut the waffle and put their money where their mouth is?

The Prime Minister: The number of nurses and doctors has increased considerably, the number of patients treated by the NHS has also considerably increased and the waiting lists have decreased. In 1979, when the Government were elected, expenditure on the NHS was £7·5 billion. This year it will be £17·5 billion.

Royal Ulster Constabulary

Mr. Peter Archer: (by private notice) asked the Secretary of State for Northern Ireland if he will make a statement on the safety of members of the RUC and their families.

The Secretary of State for Northern Ireland (Mr. Tom King): In the last month there have been 138 attacks on off-duty members of the RUC and the RUC Reserve, and their homes and families. The vast majority have taken place in predominantly Protestant areas. The whole House will wish to join me in condemning utterly these cowardly and disgraceful attacks on the men and women of the RUC who have given such loyal and courageous service to defend the Province against terrorism and to uphold law and order.
The Chief Constable, with the full support of the Police Authority for Northern Ireland and of the Superintendents Association and the Police Federation, has put arrangements in hand to provide quick and effective assistance to police officers and their families who are subject to attack or other forms of intimidation. Extra patrols are being mounted in vulnerable areas, and steps have been taken to provide suitable alternative accommodation for those unfortunate enough to have to move from their homes. In addition, the police are making strenuous efforts to bring the people responsible for this criminal behaviour to justice, and a considerable number have already been charged with serious offences associated with it.
I welcome the fact that the Churches and the more responsible political leaders have condemned without any qualification these outrages.
I look to the whole community to join together to defeat these acts of terrorism against its own police force, and to give every possible support to bring those responsible to justice.

Mr. Archer: Will the Secretary of State accept that we on these Benches join him in extending our sympathy to those officers and their families who have suffered attacks?
In recognising that violence of this kind against police officers and their families is deplorable from whatever political sector it comes, does the Secretary of State agree that it is condemned by the large majority of right-thinking people in the Unionist tradition? Will he invite those Unionist politicians who have not dissociated themselves from these attacks to make clear where they stand? Does he agree that the violence appears to stem from elements who once identified law and order with support for a particular political position, who expected the police to administer the law in a discriminatory way, and whose belief in law and order evaporated when they discovered that they too were subject to the law?
Does the Secretary of State share the view that at least some of those people have been and are involved in unlawful attacks on isolated Catholics? Will he join us in commending the stand taken by the Chief Constable in difficult circumstances in distinguishing between the freedom to march and demonstrate peaceably, and triumphalist marches calculated to provoke a disturbance?
I have two specific questions. First, does the Secretary of State agree that those who warned that plastic bullets

were an unpredictable and dangerous method of crowd control and that their use was counter-productive have been shown by the tragic injuries to Mr. Keith White to have given sensible advice?
Secondly, will the right hon. Gentleman consider, with the Home Secretary, the suggestion made from the Opposition Front Bench by my hon. Friend the Member for Hammersmith (Mr. Soley) during the debates earlier this year on the Public Order Bill that there should be a special scheme for quick and adequate compensation for policemen and others whose jobs involve a special risk of criminal injury and on whom we rely to form a front line in situations not of their own making?

Mr. King: I am grateful to the right hon. and learned Gentleman for his remarks. I immediately endorse one thing he said. I have no doubt that the overwhelming majority of people in the Province, regardless of their views about the Anglio-Irish agreement, are quite appalled by the attacks on the police. It is regrettable that some political leaders, some of whom sit in the House of Commons, have not yet felt able to condemn, without qualification, these attacks on the Royal Ulster Constabulary. One of the nastiest aspects of these attacks is that they are not just attacks on the police; there have also been nasty sectarian attacks that I know the House will deplore.
I have the greatest admiration for the Chief Constable, his senior officers and the RUC. Hon. Members may have heard that one such police officer who was attacked today, when asked in a radio interview this morning whether what had happened would undermine morale, said that it would only make the RUC stick together more closely as a family in their determination to stand against terrorism. They have stood together bravely for about 17 years and they will not stop now just because terrorism is coming from a different quarter. The whole House will respect them for that.
On the point made about plastic baton rounds, one understands the problems and difficulties involved, but at the same time the police face real problems when they are being stoned, as they were in Portadown. I am not prepared to see the police left quite defenceless against that sort of violence, although I very much regret injuries, even if they were caused to people who knew they were attending an illegal march, because that march had already been banned.
I would like to consider the point about compensation.

Sir John Biggs-Davison: Must not all politicians on both sides of the water accept their responsibilities? Was it not forecast from these Benches that the result of the Anglo-Irish agreement would be to place this splendid force, whose families are also suffering so grievously now, between two fires? In the light of experience, will the Prime Minister seek to talk to the Taoiseach and, in view of the threat to the security of the whole of Ireland, seek an appropriate change of policy?

Mr. King: I very much hope that, in his remarks, my hon. Friend was in no way condoning the violence against the police. I am sure he would wish to be associated with any statement of condemnation of the fact that the RUC should be placed in that situation. Obviously, I recognise that many people in the Province, who have the strongest feelings about the Anglo-Irish agreement and who wish to argue about it, discuss it, and see how we can provide


alternative approaches, would not dream of indulging in violence of any kind. I trust that we will respect that approach and no approach that espouses violence.
Obviously, we are most anxious—and the Prime Minister has made this clear—to enter into talks with Unionist leaders. We have just received a letter from the right hon. Member for Lagan Valley (Mr. Molyneaux) and the hon. Member for Antrim, North (Rev. Ian Paisley) expressing concern, and we shall respond to it shortly. I hope that it will be possible to have sensible talks, because it is by talking and not by violence that these problems must be solved.

Mr. J. Enoch Powell: Does the right hon. Gentleman remember that he and the Prime Minister were told in advance of the disastrous consequences that would inevitably ensue if they went ahead and made this agreement? What shall be done to the evil counsellors to whom they listened instead?

Mr. King: I am well aware of the right hon. Gentleman's feelings about this agreement. I had hoped that he would feel able to include in his remarks his condemnation of the violence shown to the RUC. That violence is regrettable, and I hope that the right hon. Gentleman will feel able even now to say so, even if in another place, and to make that known.

Sir Eldon Griffiths (Bury St. Edmunds): Why did certain elected Unionist Members approve the use of plastic baton rounds when they were directed at Sinn Fein mobs but objected to them when they were used against Loyalist mobs? Will my right hon. Friend explain to the House and to the men and women of the RUC why protection, for which requests were specifically made and which was specifically promised, was not forthcoming until after the petrol bombers had struck? Will my right hon. Friend explain that the arrangements being made now could not have been made when they were promised?

Mr. King: The first point is not a matter for me. It is for the Unionist Members of Parliament, or whoever my hon. Friend has in mind, to respond to that point. I have noted the comments elsewhere on that matter.
On the second point, I think that my hon. Friend is referring to a reply in this debate by an Under-Secretary of State to the effect that, if resources and help were needed and requested, they would be given. That is precisely what we are doing at the request of the Chief Constable. I have set out clearly in my statement ways in which, as soon as the threat emerged, steps were taken to meet it. I hope that I shall have my hon. Friend's full support—he has a particular interest in this matter—in ensuring that these co-operative efforts work as effectively as possible.

Mr. Merlyn Rees: Is the right hon. Gentleman aware that, like all his predecessors, he has every reason to praise the RUC for the way in which it has changed itself over the years from a Protestant force for a Protestant people, and I gladly do so?
In my view, the position is getting worse every day. The politicians do not count. Whatever the reason, the politicians dare not put their heads above the political parapet.
Will the right hon. Gentleman ask the Prime Minister—I offer this as a serious suggestion—to appear on the television and to talk to the people of Northern Ireland as

Prime Minister and as leader of the Conservative and Unionist party? Will she explain to them that the people over there can take any view they like about the Anglo-Irish agreement—it is a political agreement—but that the RUC has become a British police force which is there for one reason—to uphold the laws on violence, which is what it is doing?

Mr. King: I have noted those comments, as has my right hon. Friend the Prime Minister, especially in view of the right hon. Gentleman's experience and his years of service in the Province. Obviously we take those points seriously.
During the terms of office of the right hon. Gentleman and of other right hon. Members who have shared the post which I now have the honour to hold, more than 200 members of the RUC have laid down their lives in defence of the Province and of Protestants and Catholics against terrorism. They are entitled to the support of everyone in the Province and in the United Kingdom. If, as the right hon. Gentleman said, the politicians do not count any more, it is perhaps because it has not yet been possible to get talks or discussions going. This is a political matter and it is essential that it is discussed by politicians and is not tackled by men of violence, as is happening at present. That is why it is so important that we have early discussions.

Mr. Ian Gow: Is my right hon. Friend aware that those Conservative Members who support him and those who opposed the Anglo-Irish agreement join him in condemning totally attacks on members of the RUC? Is he aware that, but for the Anglo-Irish agreement, this afternoon's statement would not have been made?

Mr. King: I am grateful to my hon. Friend for his clear and unequivocal support of the condemnation of acts of violence. I hope that, in his last sentence, he did not imply that violence against the RUC could be justified. The RUC is seeking impartially to uphold the law and it is in the vital interests of every person in the Province that it should be able to continue to discharge that function. The community owes it to the RUC to give it support at this difficult time.

Mr. Stephen Ross: We would like to add our congratulations to the RUC. We recognise the courage which it is showing at this time. We also recognise the courage shown by the Secretary of State. We on these Benches much admire his responses and we hope that he will see the Anglo-Irish agreement through to its fulfilment because it is the only sane way forward in Northern Ireland.
Is protected accommodation being made available to members of the RUC who have not yet suffered any attacks? Can they move into such accommodation with their families if they so wish?

Mr. Tom King: I am grateful to the hon. Gentleman for his opening remarks. I would rather not go into detail on the question of the arrangements that are being made for the RUC. There is close co-operation between the Chief Constable and the Superintendents Association and the Police Federation in this respect. They will certainly receive the fullest support from my office, and from the other security forces with anything that can be done to help.

Mr. Michael McNair-Wilson: Further to the events in Portadown, and in view of the fact that the marching season has now begun in the Province and this year is likely to be more contentious than usual, is my right hon. Friend satisfied that the RUC has sufficient forces to cope with the parades? Will my right hon. Friend give due consideration to the Chief Constable's suggestion for an independent public tribunal to look into the routes of the parades? I beg my right hon. Friend not to put the RUC in a position where it is alienated from the support of either the majority or the minority.

Mr. King: My hon. Friend will be aware that the march which took place in Portadown was a non-traditional march. He will recall that last year, even before the Anglo-Irish agreement, violence had unfortunately taken place at Portadown when there was an attempt to reroute the march. When my hon. Friend makes such comments, I hope he will recognise the responsibility on others who wish to carry out the traditional and respected rights of marching and that they should not seek to do it deliberately in the most provocative and aggressive way through nationalist areas.
That has been part of the problem which has obviously concerned people in the past. I am very anxious that the marching season should be conducted without the strains that my hon. Friend has mentioned. Obviously responsibility falls on others to seek to arrange their business in the most appropriate way.

Mr. Roy Mason: Is the Secretary of State aware that much of this violence must weigh heavily on the shoulders of the Unionist leaders, especially when hard-liners from their own ranks are turning against their own people? Is the Secretary of State further aware that firm leadership should now be given to stop this mass intimidation of the RUC and their families? It is about time that the Unionist leaders spoke out alongside the Secretary of State and his Ministers.

Mr. King: I am grateful to the right hon. Gentleman. He is held in respect for the firm leadership he has given on previous occasions. We shall give the RUC our fullest support. I certainly hope that the message which he has just delivered will be heard by others and that they recognise their clear responsibility.

Mr. Ivor Stanbrook: Every responsible person, including every Member of this House, condemns violence, so do not let us waste any more time on that. When the Government decided to sign the Anglo-Irish agreement, was any assessment made of the scale and violence of the likely reaction among the majority population of Northern Ireland? If so, is my right hon. Friend really surprised at what has happened? If not, why not?

Mr. King: I am sure that my hon. Friend does not seek in any way to imply that violence can be justified. I hope that I will get his support about the need for discussions to take place. I understand his views on these difficult issues and I have made my own position absolutely clear in the past and my concern about the strength of the reaction. I hope that we can have talks, because that is the way to find a sensible and law-abiding way of resolving these difficulties.

Mr. John Hume: Does the Secretary of State agree that the policemen in Northern Ireland who so

clearly and in such difficult circumstances impartially upheld the rule of law in Northern Ireland last week deserve not just the support but the appreciation of the entire Northern Ireland community, but that those Loyalist Members who consistently come here to lecture the rest of us on law and order now stand exposed as to what they mean by law and order—they mean their law and their order?
Does the Secretary of State further agree that some hon. Members—I use the adjective "honourable" only because I am supposed to use it—are engaged in organising and encouraging the violence against the police in Northern Ireland in an outright campaign against the democratic process in order to create an atmosphere of fear in Northern Ireland so that decent people will not speak against it?
Finally, does the Secretary of State agree that the right hon. Member for South Down (Mr. Powell) has presented himself for most of this century in the House as the upholder of the sovereignty of Parliament but that he abandoned that today, abjectly, and in so doing abandoned the rule of law?

Mr. King: Some hon. Members and some Unionist Members have stood up bravely and have unequivocally condemned the violence against the RUC, not without some risk to themselves, and I hope that the House respects them for that, but others have not felt able to do so. I note the hon. Gentleman's further comments about those who may be involved in organising or abetting. I shall not comment on that today, but the House will have noted the Chief Constable's remarks.

Mr. Henry Bellingham: Does my right hon. Friend agree that those who currently advocate an increase in the number of troops in Northern Ireland should listen carefully to the views of the Chief Constable who has made it clear that more troops should not be moved there at the moment?

Mr. King: The House will have noted the Chief Constable's comments, and I know that hon. Members will recognise, as did the right hon. Member for Barnsley, Central (Mr. Mason), the professionalism, competence and all-round ability of the RUC. It is an impressive police force. There is a real determination on the part of the Chief Constable and throughout the RUC to meet the challenge to prove that they can command and deal with this serious situation. Having said that, I make it clear that should additional resources be needed we would obviously seek to meet that, but, as my hon. Friend makes clear, that is not the Chief Constable's request at this time.

Mr. Tam Dalyell: What is the Secretary of State's reflection on the important question asked by the hon. Member for Dorset, South (Viscount Cranborne) of the Prime Minister, but unanswered by her, that, if it had not been for the activities of the IRA, would there have been an Anglo-Irish agreement at all?

Mr. King: I think that the hon. Gentleman took part in our debates on the Anglo-Irish agreement in which that point was discussed, along with the problems that have been posed in Northern Ireland over the years and the attempts to find a way to break the stalemate and to establish a form of local administration, or whatever word one uses for it, which could command widespread


acceptance. The way in which the particular characteristics of Northern Ireland could be recognised in an effective form has defied solution, and the agreement was an attempt to break that stalemate in the interests of all the people in the Province, not in response to the problems of terrorism.

Mr. Barry Porter: Will my right hon. Friend accept from me, as one of those who voted against the Anglo-Irish agreement, and, indeed, as somebody who has frequently spoken in the House in defence of loyalism, in the proper sense of that word, that I recognise, accept and applaud the views expressed by my right hon. Friend the Prime Minister and my right hon. Friend about the recent violence, but will he also accept that the patience of those of us who have supported and who will continue to support the Union is wearing thin and that, unless and until the leaders of the Unionist parties decide and express the view that the Union and the rule of law is utmost, the rule of the paramilitaries should be dismissed immediately by them?

Mr. King: I am grateful to my hon. Friend for his remarks. My own views on the value and merit of the Union are clearly on the record, and I am determined to see that the Union is not put at risk. The tragedy is that those who shout loudest against the agreement and in any way associate themselves with the current forms of behaviour are those who represent a real risk to the Union.

Mr. Robert Maclennan: Does the Secretary of State agree that those politicians in the Province who seek to present the RUC as supporting a political settlement with which they are in disagreement are uttering a calumny upon the RUC whose sole role is to uphold the rule of law?

Mr. King: That is exactly the position. It is overwhelmingly in the interests of all the people in the Province to realise the need to respect the impartiality of the RUC in enforcing the law, whatever it may be.

Mr. Hugh Dykes: At this testing time for the Government, will my right hon. Friend hear it in mind that he has the support of virtually the whole House? Is he not shocked that today one or two prominent politicians here have not unequivocally condemned the violence? Far from acceding to the ideas of the right hon. Member for Morley and Leeds, South (Mr. Rees)—in respect to the inference of his question, not of its substance—is it not the duty of Protestant politicians in Northern Ireland not to abdicate, as the right hon. Gentleman suggested, but to get out there, condemn the violence and support the Government's policy? In due course, after passing through this testing time, they will then have the courage of my right hon. Friend the Secretary of State—perhaps even including, dare we guess it, that Jacques Soustelle, the right hon. Member for South Down (Mr. Powell).

Mr. King: The community in Northern Ireland at this time desperately needs leadership from every person in any position of responsibility. Everyone has that duty to lead. This is a dangerous and uncertain time; I make no secret of that. I will do what I can, and I feel entitled to look to every responsible person in the Province to play his part, too.

Several Hon. Members: rose—

Mr. Speaker: Order. We have a heavy day before us. We must move on.

Questions to Ministers

Mr. Giles Radice: On a point of order, Mr. Speaker. In view of the confusion arising out of the Prime Minister's answer to a question by my right hon. Friend the Member for Islwyn (Mr. Kinnock) about the status of the advice sent out last week by the National Advisory Body to directors of polytechnics and colleges, and in view of the anxiety of the 9,000 well qualified young people who may be deprived of places in polytechnics and colleges in 1987–88, would it now be possible for the Secretary of State to answer question No. 15 on the Order Paper, which requests a statement on the National Advisory Board's 1987–88 planning exercise?

Mr. Speaker: I am sorry, but that will not be possible. We have passed beyond that point. I am sorry that that particular question was not reached, but we had a fairly long run on the matter.

Mr. Radice: Further to that point of order, Mr. Speaker. Of course I accept your ruling, but my hon. Friends and I will press for the Government to make an early statement on the matter.

Mr. Stuart Bell: Further to that point of order, Mr. Speaker, and in response to the question that the Prime Minister answered, may I refer to the answer by the Parliamentary Under-Secretary of State for Education? I suggest that the Parliamentary Under-Secretary of State unwittingly misled the House by stating that the Government had no responsibility either for the National Advisory Board or for the proposals sent yesterday to every college of further and higher education. That letter stated that there was a 7 per cent. cutback in students—

Mr. Speaker: Order. That sounds like an extension of Question Time. It is not a matter for me. I cannot be responsible for answers from the Government Front Bench.

Mr Bell: I respect what you say, Mr. Speaker, and I shall bring my point of order to the point. There is a constitutional relationship between what was said by the Parliamentary Under-Secretary of State and the position of the Government. As I have indicated that the hon. Gentleman misled the House, would it not be appropriate for him to make an early statement rectifying that misleading statement?

Mr. Speaker: Order. I do not know whether the Parliamentary Under-Secretary of State did so, unwittingly or not, but I am sure that he will have heard those comments.

Entry Refusals (Rights of Members)

Mr. Max Madden: I wish to raise a point of order of which I have given you notice, Mr. Speaker. It concerns the rights of hon. Members in connection with immigration matters, and I think that it is a matter directly for you.
Last Friday morning at 10 minutes past nine o'clock a visitor to this country was refused entry. A message was left with a relative of the sponsor, who is a constituent of mine. I was asked for my help at 10 o'clock. I immediately phoned the Home Office which made inquiries and rang back a few minutes later to tell me that it was impossible to accede to my request to stop the visitor's removal or for me to make representations on his behalf as he was already on a flight taking him to Pakistan. You will remember, Mr. Speaker, that immediately before the Easter recess we received assurances from the Home Secretary that every effort would be made to ensure that the guidelines concerning the rights of Members of Parliament in immigration matters would be exercised reasonably and flexibly to allow us an opportunity to exercise those rights. If the immigration authorities act as they did last Friday—which an official at the Home Office has described as "undue haste"—the immigration authorities will not be limiting the rights of hon. Members but removing them altogether.
Therefore, Mr. Speaker, I ask you to inquire urgently into the circumstances of this case and ask the immigration authorities and the Home Office to ensure that the period of time between refusing a visitor entry into this country and the removal of the visitor from this country is sufficient for our constituents to ask for our help and sufficient to enable us to give the help they are entitled to receive, but on this occasion were denied.

Mr. Speaker: I have allowed the hon. Gentleman to make his point, but it is not a matter for me. The operation of the immigration regulations is not a matter for the Chair.

Several Hon. Members: rose—

Mr. Speaker: Order. The regulations are not a matter for the Chair.

Mr. Dennis Skinner: On a point of order, Mr. Speaker. You will have noticed that during Question Time several matters were covered but, unfortunately, not the one to which I shall refer. During the recess there was mention of the alleged conspiracy of Gerry Gable, the editor of Searchlight, in which a Tory Member of Parliament was involved. Many of us had thought, quite properly, that during Question Time someone would have got round to raising that matter. In fact, my hon. Friend the Member for Battersea (Mr. Dubs) was only too anxious to catch your eye—

Mr. Speaker: Order. No hon. Member got round to that.

Mr. Skinner: I have an answer for it.

Mr. Speaker: The hon. Gentleman probably has, but I cannot see that in any conceivable way it is a matter for me.

Mr. Skinner: I raise the point of order with you, Mr. Speaker, because it borders on the question of privilege of Members of Parliament. If there is the faintest possibility


that the Prime Minister could be induced to answer questions on this matter later, we might get round to that question.

Mr. Speaker: Order. The hon. Gentleman should try his luck on Thursday.

Mr. Madden: Further to my point of order, Mr. Speaker.

Mr. Speaker: I have nothing to add to what I have already told the hon. Gentleman. I allowed the hon. Gentleman to make his point, but it clearly was not a matter for me.

Mr. Madden: May I ask you to reflect, Mr. Speaker, on the fact that it is pointless and futile for us to have guidelines, which were debated in the House before Easter, giving hon. Members clear rights in immigration matters if those rights are to be obliterated by the immigration authorities? I believe that it is directly your responsibility.

Mr. Speaker: Order. It is certainly not my responsibility. It is the responsibility of the Government Department concerned. The hon. Gentleman must raise the matter with that Department.

Tin Mining (Cornwall)

Mr. David Harris: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the tin crisis in Cornwall, particularly the suspension of mining at Geevor".
I hope that I and my colleagues from Cornwall, particularly the hon. Member for Truro (Mr. Penhaligon) and my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd), have said sufficient over the past weeks and months to convince you, Mr. Speaker, and the House of the specific nature of the crisis facing Cornwall and of the importance of that crisis for the count) and for those who work in its tin mining industry.
I am afraid that during the recess the importance, seriousness and urgency of the matter has intensified dramatically, particularly a week ago when, unfortunately, Geevor mine in my constituency was forced to give notice to some 270 of its employees that they would be laid off at the end of last week.
It must have been one of the saddest days in the history of Cornwall when that took effect last Friday. It certainly had a tremendous impact on the whole of the county and, dare I suggest, even beyond the boundaries of the county, when the final shift came up from Geevor mine last Friday. The miners did not know whether they would ever return to the mine. Of course, whether they will return depends, in large measure, on the response to a submission today from the management of Geevor mine to the Government.
Here, I pay tribute to my hon. Friend the Minister of State, Department of Trade and Industry, who is in the House today, who was very good over the holiday weekend to take repeated telephone calls from me and listen to the urgent pleas I was making. However, the Government will now have to decide the fate of the mine and the fate of the tin industry in Cornwall.
In urging you, Mr. Speaker, to consider this matter as one of supreme urgency, I shall quote from the report of the Select Committee on Trade and Industry, which was published just as the House was going into recess before Easter. On the whole tin crisis the Committee said that if the Government
waits for the tin price to settle before taking action, there will be no tin industry left in Cornwall".
The concluding paragraph of the report said:
It is of supreme importance that the Government should begin negotiations with the industry on the possible types and amounts of aid and conclude them without delay. We believe that the Cornish tin industry is worth saving.
That is what the Select Committee said and that sentiment is echoed by everyone in the county of Cornwall and by many beyond it.
I urge you, Mr. Speaker, to consider giving leave to move for an emergency debate so that the House may discuss, without delay, the seriousness of the situation and particularly the plight of the miners.

Mr. Speaker: The hon. Member for St. Ives (Mr. Harris) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the crisis in the Cornish tin industry following the suspension of mining at Geevor and the lay-off of 270 miners.


I fully understand the concern that the hon. Gentleman has expressed, but I regret that I do not consider that the matter he has raised is appropriate for discussion under Standing Order No. 10. I cannot, therefore, submit his application to the House. I hope that the hon. Gentleman will find other ways of raising the matter.

Anglo-Hungarian Conductive Education Project

Mr. Dave Nellist: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific matter of public importance that should have urgent consideration, namely,
Government financial assistance for the Anglo-Hungarian conductive education project.
—[Interruption.] I am sure that Tory Members will find it even more amusing when they find out what the project is.
The matter is urgent and could not have been raised in Parliament before today because the extraordinary and moving documentary entitled "Standing up for Joe" was transmitted by the BBC only last Tuesday, 1 April. The hour-long film showed children with some of the severest physical handicaps—we shall have some more Tory laughter now—which led to extreme problems in controlling their body movements. In this country such children would receive care and compassionate treatment, but would be unlikely to make the breakthroughs shown in that film. The film showed children in Hungary who were wheelchair-bound at the beginning of their treatment at the Budapest clinic, and then showed them ice skating after two or three years of conductive education.
The matter is important because thousands of families watched that programme and within a couple of days of transmission the 1,000 information leaflets prepared for distribution had been used up. Those families were amazed at the improvement that conductive education could bring, because they had always thought that such improvements were beyond the capability of their children.
The tragedy is that the few dozen places available at the Petö clinic in Budapest for children from overseas, including those from my constituency in Coventry, presently receiving or hoping to receive treatment will be vastly oversubscribed as a result of the revelations of that documentary. The position will be exacerbated by agreements and visits agreed between the Hungarian institute, Japan and America, which will stretch the facilities beyond the reach of families in this country.
That brings me to the urgency of my request for a debate. This morning I learnt from the British Council that on 21 March the Government signed a cultural agreement with the Hungarian Government. It states:
Both sides will encourage the conclusion of an agreement on co-operation between Birmingham University and the Teacher Training and Education Institute for the Motor Disabled.
That paragraph refers to a project to start in Birmingham a teacher training centre to bring the full benefits of conductive education to children and families in Britain—benefits which the Paymaster General and Minister for Employment saw on his visit in late 1984 and which, despite his encouraging words, have received no concrete or specific financial support from the Government. That project can begin in September only if, in the next few days, the Government find £250,000 to assist its establishment.
That sum, which is minute compared with other expenditure which the Government consider worth while, could be added to the £200,000 already promised by


Birmingham city council, the £200,000 given by Dr. Barnardo's and the £75,000 given by the Parkinson's Disease Society. The Parliamentary Under-Secretary of State for Education and Science, who is in the Chamber, said on 29 October 1985 that no funds were available from the Government. It could be done on a pound-for-pound basis, as the Government offered in 1981 in a press release entitled
£1 for £1 to help mentally handicapped children
to assist the charities which have already raised pound;500,000.
The project could bring enormous and extraordinary benefits of conductive education to Britain and to the tens of thousands of families affected here. It is impossible in this short debate—

Mr. Speaker: Order. The hon. Gentleman has had four minutes. Will he bring his remarks to a close?

Mr. Nellist: It is impossible in such a short application to convey the full impact—[Interruption.]

Mr. Speaker: Order. The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
the Government's financial assistance for the Anglo-Hungarian conductive educational project.

Mr. Nellist: rose—

Mr. Speaker: Order. I am on my feet. The hon. Gentleman knows that the rule is that three minutes are allowed for applications under Standing Order No. 10. I told the hon. Gentleman that he had already had four minutes, and I must now deal with the matter.
I listened with great care to what the hon. Gentleman said, and I hope that he will have further opportunities to raise this matter, but I regret that I do not consider that it is appropriate for discussion under Standing Order No. 10 and I cannot, therefore, submit his application to the House.

Mr. Nellist: On a point of order, Mr. Speaker. Could you or the Clerks tell me how much time the hon. Member for St. Ives (Mr. Harris) had to make his application? I was about 40 seconds away from finishing my application. This is the first time that I have seen you stop an hon. Member during his concluding remarks in an important application under Standing Order No. 10.

Mr. Speaker: This is the first occasion on which the time allowed has been exceeded. The hon. Member for St. Ives (Mr. Harris) spoke for just more than three minutes. I indicated to him that his time was up and he sat clown. I warned the hon. Gentleman that he had spoken for four minutes. This is a rule of the House, not my rule.

Airports Bill

Mr. Alfred Morris: On a point of order, Mr. Speaker. I shall be grateful for your guidance in relation to the Airports Bill. On the basis of advice from parliamentary counsel I submit that, in view of events during the Easter recess, there is a strong argument for holding that the Bill is hybrid and that, in accordance with the Standirg Orders, it should be referred to the Examiners.
Manchester Airport plc is a company which commenced trading on 1 April. It has been set up to control the operation, development and management of Manchester airport. In law, the company is now an entirely independent trading company. It functions independently of the district councils and of local authority financial controls. As a result, Manchester Airport plc, unlike other airports affected by the Bill, can now raise money on the market in the normal way.
Clause 20 of the Airports Bill would apply to public airport companies the expenditure controls in the Local Government, Planning and Land Act 1980. That clause applies to advances and share issues made in respect of public airport companies which, as defined in clause 15(1) of the Airports Bill, includes airport companies whether or not formed under the powers proposed in the Bill. It appears, therefore, that, for the purposes of the Bill, Manchester Airport plc will be a public airport company. As a result it will become subject to local authority expenditure controls.
It is on that basis that I suggest that the Bill is now hybrid. As I understand the position, the effect of earlier decisions as to hybridity has always been that persons or bodies who were on equal terms before the passing of the Bill maintain an equality thereafter.
I have drawn your attention in a letter, Mr. Speaker, to precedents which have some relevance to this case—in particular, the Local Dues on Shipping Bill in 1856 and the Union of Benefices Bill in 1873— and will not detain the House about them this afternoon.
The true effect of the Airports Bill is that, if it is passed, other local authorities will be required to form public airport companies which will be under the same financial control as today while, by contrast, the Manchester company which now trades subject only to the constraints of company law will for the first time be subject to controls. The Bill will accordingly alter the status quo as between the Greater Manchester districts and other local authorities.
Finally, I must refer to the definition of hybridity by Mr. Speaker Hylton-Foster in connection with the London Government Bill in 1963. He defined a hybrid Bill as:
a public Bill which affects a particular private interest in a manner different from the private interest of other persons or bodies of the same category or class.
It is widely felt that, on that definition alone, the Airports Bill is now hybrid. I do, of course, appreciate that the present case appears to be unprecedented and by definition, therefore, no previous ruling on hybridity may directly apply. That being so, I know that it may thus be difficult for you, Mr. Speaker, to rule on my point of order today.

Mr. Speaker: I thank the right hon. Gentleman for raising the matter, for sending me a letter, and for what he said on the point of order. I shall, of course, look carefully into the matter and rule on it tomorrow.

SCOTTISH AFFAIRS

Ordered,
That the matter of the development of the proposals for Scotland in the Green Paper on "Paying for Local Government", being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for its consideration.—[Mr. Archie Hamilton.]

STATUTORY INSTRUMENTS, &c.

Ordered,
That the Metropolitan Roads Trunking Order 1986 (S.I., 1986, No. 153) be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Archie Hamilton.]

Right to Interest

Mr. Richard Ottaway: I beg to move,
That leave be given to bring in a Bill to establish a legally enforceable right to interest on late payment of debts.
I repeatedly hear cries from Nottingham business men who say, "We have never had a better year for turnover, but we are still in danger of going broke," or, "If all our bills were paid, we would be millionaires, but we cannot recover the sums due." How many times have we heard those cries in industry today, especially in the smaller companies where cash flow represents one of the biggest problems? In a recent survey carried out by the Nottinghamshire chamber of commerce, firms were asked to name four factors which most limited their business prospects. After interest rates, the second on their list was cash flow.
Getting paid has always been a problem, but as money has got tighter in recent years it has become harder still. Any company which has survived the recession is reporting increased orders and a new wave of confidence, but the problems of getting paid are becoming worse. Long delays in payment are being experienced and the worst offenders seem to be large companies, which are making large sums from their capital reserves and which, because of their industrial muscle, can delay payment to smaller companies, which rely upon them for their business.
A classic example is a photographer who complained about advertising agencies for which he worked and which use excuses such as, "There is no sign of the invoice", or, "We cannot get at that invoice until the end of the month because it is in the computer." When it was in the filing cabinet, they got it within minutes. Loth as I am to tell tales against my party's advertising agency, I must say that he complained that, in his view, the main offender was the advertising agency Saatchi and Saatchi which, at the very earliest, only paid him some four months after the job.
The proposal enshrined in the Bill is that, no matter how long it takes to get paid, the party who has been out of pocket will be entitled to sue for interest. Incredibly there is at present no right to sue for interest on the late payment of a debt. A person can sue for interest if he commences proceedings before he is paid, but that means that the only way to be sure of receiving interest is to issue a writ with every invoice. That is hardly likely to lubricate the wheels of industry.
The Bill would give anyone a legally enforceable right to interest. That means that the right would not be confined just to business men but would apply to anyone who is owed money by, say, a Government Department. However, I am pleased to report that Government Departments and local authorities are, by and large, quite prompt about paying their debts. Critics of the proposal may suggest that it would be hard to define when the right to interest arose—a certain amount of leeway must be given to make a payment. I quite agree, and the proposal is that the right to interest arises 30 days after notice has been given of the intention to enforce the right. Enforcing the right would be easy, utilising the facilities of the county court, which has a jurisdiction of up to £5,000.
It may be said against the Bill that it is impinging upon a relationship between two contracting parties who could make a contractual relationship for interest if they so


wished. As someone who is most concerned about individual rights, and about the rights of the individual rather than the collective, that is a criticism which I have considered carefully and rejected. The object of the Bill is to protect the small man against oppression from the large company. It is interesting to note that in a CBI survey only 19 per cent. said that they included a provision for interest in their contractual terms.
Why has there not been such a right to date? As long ago as 1978, the Law Commission, in its report on interest, concluded that the existing law did not provide adequate means of redress for the creditor who is kept out of his money by his debtor, and recommended that
the introduction of statutory interest is appropriate and necessary".
We are very much the odd man out in Europe. Only Ireland and the United Kingdom, with the exception of Scotland, do not have laws entitling creditors to interest on the withholding of a debt. In certain instances even Scottish law provides a right. There is even a precedent in English law in that the little used Uniform Laws on International Sales Act 1967 gives an entitlement to interest where the buyer delays payment in breach of contract. But that is not a general right.
It has been argued that a voluntary code is sufficient, but, although I would welcome a voluntary code, I cannot accept that it alone would be sufficient. Payment of interest, on a voluntary basis, has not worked during the past few hundred years, and I see no reason why it should work now. It is vital to put some statutory teeth into combating this problem.
It is said that industry does not want the measure, but that simply is not true. Since starting my campaign to introduce a right of interest I have received substantial support. I have the support of the Nottinghamshire chamber of commerce, the Institute of Directors and the small firms council of the CBI. The full council of the CBI is actively considering the proposal and I hope that it will shortly be giving its support to it. The CBI recently carried out a survey on the late payment of trade debt among small firms. Among the questions asked was
If there was a right to interest do you think you would ever use it?
Of those asked, 44 per cent. said yes, which included a yes answer from 67 per cent. of the construction industry. But more interesting still is the fact that when asked
If you were automatically entitled, by law, to interest on any debts paid late, do you think your customers would pay more promptly?
a staggering 85 per cent. answered yes.
To me, that shows that the mere existence of a right to interest would result in the faster payment of bills without the need to refer to the courts. That must be an utterly desirable objective, and I commend the Bill to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Richard Ottaway, Mr. Patrick Nicholls, Mr. Andrew Rowe, Mr. Michael Grylls, Mr. Michael Fallon, Mr. Michael Forsyth and Mr. Michael Knowles.

RIGHT TO INTEREST

Mr. Richard Ottaway accordingly presented a Bill to establish a legally enforceable right to interest on late payment of debts: And the same was read the First time; and ordered to be read a Second time upon 9 May and to be printed. [Bill 127.]

Orders of the Day — Dockyard Services Bill

As amended (in the Standing Committee), considered.

Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. You may recall that before the Easter recess I raised a point of order about the Bill being read today, prior to the Public Accounts Committee being able to produce its report on the control of dockyards, their operation and manpower. On Monday 10 March 1986, the PAC took evidence in relation to such matters, and in both public and private sessions matters were raised—certainly in private session—that would affect the tabling of amendments and their potential selection.
Is it not unreasonable of the Government to insist on the Report stage and Third Reading of the Bill today in the knowledge that the PAC report has not been published? Does that not represent an interference with our proceedings, and is there not an argument for suggesting that proceedings on the Bill should be suspended pending the report's publication, so as to ensure the widest and most informed debate possible?

Mr. Speaker: The hon. Gentleman knows that I am not responsible for Bills that are brought forward by the Government. I had no difficulty in selecting amendments which were submitted and which appear on the Amendment Paper.

Mr. Martin J. O'Neill: Further to that point of order, Mr. Speaker. On 11 February Standing Committee D discussed the Bill and the Minister of State said:
We have made it clear that a draft of the contract with the private contractor will be made available to the House. Many of the draft contract conditions, the 73 annexes for example, will be set out in the invitation to tender documents, of which we will make as much as possible available."—[Official Report, Standing Committee D, 11 February 1986; c. 489.]
The documents were placed in the Library at 3 pm today. They are extensive, and it could be suggested that the three and a half hours that it took for them to be delivered from the Ministry of Defence was due to the fact that the clerk could not carry them more quickly. The information would have been extremely helpful to those participating in the debate. Although the Minister has been as good as his word, he has not carried out the spirit of his remarks. Will you consider that point, Mr. Speaker?

Dr. David Owen: Further to that point of order, Mr. Speaker. I have just been to the Library and have examined the documents. As has been said, they are compendious. There are three volumes, which are seven or eight inches thick. There is also an extraordinarily interesting document which is relevant to this debate. I refer to the report of Fuller Peiser, on the scheduling and valuation of assets; the stage one report on Devonport dockyard, and volume two.
We are dealing with this whole question today. Are you prepared, Mr. Speaker, to urge the Government to postpone the Report stage and Third Reading? It is intolerable that we should suddenly receive such


information at this late hour. Will you do your best to change the business of the House to allow these important documents to be studied and examined?

Mr. Speaker: Those are matters for the Leader of the House. I think that we must now proceed.

New Clause 1

REPORT ON COSTS AND SAVINGS ARISING FROM PROVISION OF DOCKYARD SERVICES

'The Secretary of State shall set out and itemise in a report to be laid before each House of Parliament all the costs and savings in excess of £100 incurred by and owing to the Exchequer from any arrangements made in consequence thereof for the provision of designated dockyard services by any company or companies'.—[Mr. Denzil Davies.]

Brought up, and read the First Time.

Mr. Denzil Davies: I beg to move, That the clause be read a Second time.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) raised an important point of order and rightly said that the Bill's Third Reading should not be debated until we have received the report of the Public Accounts Committee, which inquired into costs. We quite understand why the Government are concerned not to have to say too much about the costs and possible savings that will result from the Bill.
4.30 pm
In the 24th sitting of Standing Committee D on 13 March the Under-Secretary made an extraordinary statement which is germane to the point of order raised by my hon. Friend the Member for Workington:
The Government's plans are about more than profit and loss. I shall not follow the right hon. Member for Llanelli (Mr. Davies) down the path that he took on costings. It is not relevant to the Bill.
I should have thought that costings were germane and basic to the Bill. The cost to taxpayers should be part of the whole investigatory function of the House. The Under-Secretary also said:
the House will be able to debate on Third Reading the policy issues, including questions of costings on which the Public Accounts Committee may by then have reported."—[Official Report, Standing Committee D, 13 March 1986; c. 777.]
Of course the Public Accounts Committee has not reported. As my hon. Friend said, we would have been in a much better position to debate the Bill if we had had the report of the Public Accounts Committee.
I understand why the Minister of State and the Government Whips want the Bill to proceed. Costings are very embarrassing for the Government. The Minister of State may deny this, but it seems to be clear that there will be no savings to the Ministry of Defence. As we have said from Second Reading onwards, this ill-considered and highly speculative Bill will cost the Ministry of Defence and the defence budget money. Therefore, I can understand why the Government are happy that the Bill should be debated today before the publication of the Public Accounts Committee's detailed report.

Mr. Campbell-Savours: Having seen all the documents, may I point out to my right hon. Friend that it is impossible for the House to consider the Bill unless hon. Members see the figures that were presented to the Public Accounts Committee?

Mr. Davies: My hon. Friend has seen the figures and I have not. We shall have to do the best we can with the various statements from Ministers. Indeed, last week a civil servant in the Ministry of Defence held a fairly late press conference, no doubt hoping that the press would not pick up some of the things he said. That civil servant made it clear that there would not be any saving and that the budget of the Ministry of Defence would suffer because of the Bill.

Mr. Dick Douglas: On a point of order, Mr. Deputy Speaker. I apologise for raising the matter in the House but I have just been to the Library and I have here the only documents that are available to the House. These are the articles of association of the companies which the Government propose to set up under the Bill. I have here the only copies that are available to the Library. I have also got copies of the document which was referred to by the right hon. Member for Plymouth, Devonport (Dr. Owen). These, too, are the only copies that are available to the Library.
While I respect the difficulty you are in, Mr. Deputy Speaker, I do not think it was right that the documents should have been presented at the end of a recess. If they had been available at the beginning of the recess hon. Members would have had the opportunity to discuss them and to put down amendments. Opposition Members pressed time and time again in Committee for the articles of association and other documents to be made available. For the documents to be placed in the Library at this late hour is an abuse of the Government's position and shows arrogance on their part. They had plenty of time to make the documents available sooner.
I am in training for the London marathon but not for lifting these documents. I can hardly carry them. As I have said, these are the only copies available. I urge you, Mr. Deputy Speaker, to consider the matter with the Clerks and perhaps to ask for a business statement from the Leader of the House on the suspension of the sitting so that hon. Members may have an opportunity to examine these documents.

Mr. Deputy Speaker (Mr. Ernest Armstrong): I can only reiterate what Mr. Speaker has said. That is a matter of complaint against the Government; it is not a matter for me in the Chair.

Mr. Davies: The points made by my hon. Friend are again indicative of how ill-thought out, how ill-considered and how ill-prepared the Bill is.

Mr. Michael Foot: Further to the point of order, Mr. Deputy Speaker. A most serious point has been made by my hon. Friend the Member for Workington (Mr. Campbell-Savours) and others. Can we not have a statement from the Government? I fully understand that it is not in your power to change the proceedings that have been put down, but it is certainly within the power of the Minister who is supposedly in charge of the Bill to get up and make a statement. He could be asked to make a statement and to give some explanation. If he cannot give an explanation to the House, it is utterly intolerable that the Bill should proceed in these circumstances. I urge that an opportunity be given to a spokesman for the Government to make a statement about the complaints.

Mr. Campbell-Savours: Further to that point of order, Mr. Deputy Speaker. I am sorry to press the matter but my


right hon. Friend the Member for Blaenau Gwent (Mr. Foot) has raised a point in addition to the points that were raised earlier by my hon. Friends. My hon. Friend the Member for Dunfermline, West (Mr. Douglas) brought documents to the Chamber after Mr. Speaker had given his former ruling. This was new evidence in support of the case for the suspension of the sitting. In the light of the new information, Mr. Deputy Speaker, I wonder whether you would suspend the sitting for 15 minutes to examine whether there has been an abuse of our proceedings in so far as it is unreasonable and unfair to place a responsibility on hon. Members to consume all the information that is available in those documents prior to being able to debate the Bill responsibly.

Mr. Deputy Speaker: I have listened carefully and understand the concern of hon. Members, but this is not a matter for me. The complaint is against the Government. I have no doubt that the Minister has heard it and will reply in due course.

Mr. Denzil Davies: Further to that point of order, Mr. Deputy Speaker. The Minister of State owes the House at least an explanation why these important tender documents—I understand that we have not got the articles of association—arrived in the Library only a short time ago. It is extremely difficult for hon. Members to consider them. As well, we have not got the report of the Public Accounts Committee. I appreciate that Ministers did not give an assurance on that, but it is difficult for us to debate the new clauses without the PAC report, without having had time to consider the documents that are now available and without the articles of association which are germane to new clause 2. In view of the time the Government had to prepare the Bill, the time it was in Committee and the fact that there was the Easter Adjournment, we should expect a statement from the Minister of State at least as to why it has taken so long to make the documents available in the Library.

The Minister of State for Defence Procurement (Mr. Norman Lamont): If I may intervene, I must point out that documents were made available on 3 April only to the companies interested in tendering. This has been the first opportunity since then when the documents could be made available to the House. The choice of business for the first day was discussed through the usual channels. The documents could not have been made available to the House before today. Of course, I accept that the right hon. Gentleman is making a serious point, but we are discussing the principles of the Bill. I appreciate that he would have liked to have had the documents earlier but there is no way in which they could have been made available to the House sooner.

Mr. Davies: That really will not do. It is all very well for the Minister of State to say that the companies had the documents only on 3 April and so this was the first opportunity on which they could be made available to the House. The Government could have postponed today's consideration of the Bill. It is no good saying that the Government's business managers brought the Bill on today. The Ministry of Defence is in charge of the Bill. The Minister of State could have said to the Government's business managers, "We cannot have this Bill on Tuesday because on Tuesday I shall be delivering in a pantechnicon or whatever these enormous documents to the Library of

the House and I want to make sure that hon. Members have time to read the documents before the debate takes place." The primary responsibility for putting the Bill through the House lies with the hon. Gentleman. It is no good the hon. Gentleman trying to hide behind the Government's business managers. He should have said, "Postpone the Bill for a week," and that would have happened.

Dr. Owen: Further to the point of order, Mr. Deputy Speaker. There may be some misunderstanding because the documents which I have relate only to Devonport, and there is only one copy. The copies that the right hon. Member for Llanelli (Mr. Davies) referred to relate to Rosyth. We are discussing both dockyards, in which we have a considerable interest, and the only documents available are the contractual tenders. When the Minister of State and, more important, the Secretary of State reflect on this, they must realise that we are in an intolerable position because new clause 1 relates to financial assets and costs and the Government's judgments about the effects and consequences for the defence budget.
We could help the Minister out. We are reasonable people. If we could have a suspension of an hour or two, the business of the House would be expedited. The danger in the Government not giving way is that we may have to resort to the traditional weapon available to all Oppositions. We have been most reluctant to use that weapon as none of us wishes to filibuster.

Mr. Gordon Brown: Further to that point of order, Mr. Deputy Speaker. Are you aware that the Minister of State's statement does not fully accord with the facts available to me? He has given us the impression that these documents were put in the Library on the earliest possible occasion. When I telephoned the Ministry of Defence this morning to ask that these documents be made available immediately, I was told that it was under instructions not to place them in the Library until 2.30 this afternoon. When I went to the Library at 2.30 pm, the documents had not arrived and I had to remind the Ministry about them. The documents arrived at 3 pm, so the Minister of State's statement that he did everything possible to make them available at the earliest opportunity does not accord with the timetable of events that has led to this sorry state of affairs this afternoon.
The Minister of State was asked specifically in a written question before Easter to delineate the costs involved in the Government's dockyards privatisation scheme. He replied that he would write to me as soon as possible. We are now debating new clause 1, but there has been no reply. The Leader of the House should come to the House to make a statement about why official business has been affected by the Ministry of Defence's reluctance to bring vital documents to the House.

Mr. Douglas: Further to the point of order, Mr. Deputy Speaker. I must apologise to the House because, in my eagerness, I brought not the articles of association, but the tender documents. To the best of my knowledge, we do not have the articles of association of these companies. Nevertheless, it is very clear to all who have eyes to see and ears to hear that we are most disturbed at the method and approach adopted by the Government.
4.45 pm
I suggest, Mr. Deputy Speaker, that you consider whether it is in order to suspend the sitting until the Leader


of the House is available to make a statement on the business of the House and to decide whether we should proceed, in view of the difficulties in which we have been placed by the Government's mismanagement.

Mr. Tam Dalyell: Further to that point of order, Mr. Deputy Speaker. You may recollect that this is not the first occasion in this Session when Ministers have engaged in such parliamentary hanky-panky. You will recall that, during the debates on the Westland affair, the text of the Solicitor-General's letter was promised by the Leader of the House. When we went to the Library, we found that it was there, but under embargo on the orders of a higher authority—which later turned out to be 10 Downing street—that it should not be released.
Some of us believe that the heart of the Leader of the House is often in the right place. He said that the full text of the Solicitor-General's letter, and not the selective text leaked for political purposes, should be made available before the debate on Westland. Should we not wait, Mr. Deputy Speaker, until the arrival of the Leader of the House, who has previously proved himself to be relatively enlightened and has put the House of Commons before party political interests?

Mr. Foot: Further to that point of order, Mr. Deputy Speaker. The Secretary of State for Defence has now arrived and he will have heard the strong sense of dismay that has been expressed in many parts of the House on this matter. He must recognise that he has a responsibility. It is open to him to move that the sitting be suspended for 10 minutes, or to get agreement to that. I am not suggesting that that would solve the problem, as the House has a right to study the documents.
The Government's statement has only made matters worse. It would be intolerable if the House were asked to discuss the Bill when there is confusion about the availability of documents and the form in which they have been presented. I urge the Minister to communicate with the Leader of the House. The proceedings here are his responsibility. The Secretary of State for Defence also has a responsibility, and he should announce that he will send at once for the Leader of the House to come to the House's aid to get our business in proper order.

Mr. Deputy Speaker: Perhaps I can help the House. I have listened carefully to the strong representations that have been made on the point of order, but the complaint is against the Government and not a matter for the Chair. I see no reason why we should not pursue our discussion of new clause 1. The Secretary of State and others have heard the point of order. It is for the House to decide how it will get the information that it requires. It is not a matter for me.

Mr. O'Neill: Further to the point of order, Mr. Deputy Speaker. I think that, with respect, you are not in full possession of the facts. The volumes are the Ministry of Defence royal dockyards invitation to tender for the operation and management of Her Majesty's dockyards at Devonport and Rosyth. We have so far skated around the nature of the documents. If we are to be in any position to consider the Bill, we have to have an opportunity to reflect on those documents.
The two substantial documents beside me relate only to Rosyth dockyard. I think that the right hon. Member for

Plymouth, Devonport (Dr. Owen) would not regard it as disrespectful of me to say that he filched the documents relating to Devonport from the Library without the permission of the Librarian. The dockyard is in his constituency, but we were not allowed to take the documents out of the Library. My hon. Friend the Member for Dunfermline, West (Mr. Douglas) requested and was subsequently granted the loan of the Rosyth documents.
We are discussing three substantial volumes, one of which is complex, to say the least. Its contents are set out in indexes which run to some four pages. The information might seem somewhat arcane to the hon. Member for Wells (Mr. Heathcoat-Amory) who participated virtually not at all in Committee, but some of us became students of the publications of Touche Ross, albeit only those which were made freely available. Some were not made available in Committee as there was a cloak of secrecy masquerading as commercial confidentiality which prevented our seeing the documents.
We could get through this pile of memorandums fairly quickly, as most of us know our way around the dockyards, having spent some 70 hours debating them in Committee. That is all the more reason to be given a reasonable amount of time to consider the documents.
This is not an attempt at filibustering. We are anxious to make progress. However, the Government's managers should appreciate the difficulties under which not only Opposition Members but Conservative Back Benchers will labour today unless there is an adjournment during which we can look at these documents. I admit that that will be very difficult, because there is only one copy. However, if we could have a 30-minute adjournment it could be split up between those Opposition Members who served on the Standing Committee and looked at very carefully.
Surely there is a mechanism whereby the Leader of the House, the Government's business manager, can be summoned to the Chamber to explain why the Government have allowed the Ministry to deal with hon. Members in such a disrespectful manner. There ought to be a mechanism whereby the rights and responsibilities of the Government can be questioned in this Chamber. You as our protector, Mr. Deputy Speaker, should be able to bring the Leader of the House to the Chamber and ask him to provide an explanation for an action that is leaving an extremely sour taste in the mouths of, I think, all hon. Members, certainly in those of Opposition Members.

Mr. Deputy Speaker: Let me remind the House that all that is happening at the moment is that new clause 1, which was tabled by the Opposition, is being proposed. I see no reason at all why we should not continue to discuss new clause 1. If the usual channels, or any other hon. Members, want to make representations to each other, that is another matter, but it is not a matter for me. I see no reason why we should not continue to discuss new clause 1.

Mr. Dalyell: Further to that point of order, Mr. Deputy Speaker. I am wondering whether this is symptomatic of the difficulties that the Leader of the House may have with the Ministry of Defence. It will be within your recollection that on 25 March, at column 865, I raised in detail and at some length the case of Mr. Jim Smith, a whistle blower at the Ministry of Defence—

Mr. Deputy Speaker: Order—

Mr. Dalyell: —on which my hon. Friend the Member for (Workington) (Mr. Campbell-Savours) has done so much work.

Mr. Deputy Speaker: Order. I am on my feet. I do not see the relevance of that point of order.

Mr. Dalyell: The relevance of that point of order is to be found in column 879 when the Leader of the House said:
I shall look at the points made by the hon. Member for Linlithgow about Jim Smith and shall get in touch with my right hon. Friend the Secretary of State for Defence. I understand the analogy the hon. Gentleman drew with the pit prop case in the 1960s and 1970s.
I then asked him:
Will the right hon. Gentleman raise James Smith's case with the Treasury?
The Leader of the House said:
Yes, certainly."—[Official Report, 25 March 1986; Vol. 94, c. 879.]
Since then I have heard nothing. I am wondering whether the Leader of the House stands in too much awe of the Ministry of Defence. These are matters on which he ought to be in a position to tell the Ministry, whatever the pecking order may be, what it ought to be doing.

Mr. Deputy Speaker: Order. I am even more convinced now that the hon. Gentleman's contribution is not relevant to the discussion of new clause 1.

Mr. John McWilliam: Further to that point of order, Mr. Deputy Speaker. As you rightly said, the fixing of the business of this House is a matter for the Leader of the House, but that is not what we are discussing. We are discussing documents that have been laid in the Library of this House. The assumption is that those documents are available to all hon. Members. Since the only copy is lying down there at the Dispatch Box, it is patently not the case that all hon. Members had an opportunity to see the documents before this debate began. Ministers have seen those documents and copies have been laid in the Library, but my hon. Friends and I have not yet had an opportunity to see them. The contents of those documents are germane to the debate.
My hon. Friend the Member for Clackmannan (Mr. O'Neill) raised a point that is germane to new clause 1. We are asking that the House should be adjourned for 15 minutes so that the advice of the Leader of the House can be sought about how to proceed. I do not know how we can continue with this debate since we have been unable to consider properly the information that is contained in those documents. It will be impossible to consider the amendments without having had an opportunity to study them. The Minister chose to lay those documents in the Library. It was his choice. If he had chosen not to do so it might have been possible to continue with this debate. However, as he chose to lay those documents in the Library he will undoubtedly say that the information is there, although we have had no opportunity to study it. Therefore, both sides of the House are being put in an unfair position.
I agree that it is the duty of the Leader of the House to fix the business of the House but it is for the Chair to determine whether a debate can properly and fairly take place. Information has been made available and placed in the Library of the House and all hon. Members must, in justice, be given an opportunity to study it, otherwise the matter cannot properly be debated.

Mr. Deputy Speaker: I have listened carefully to that lengthy point of order. It merely reiterates what has already been said. The complaint is against the Government. I have said already on four or five occasions that it is not a matter for me.

Mr. Douglas: Further to that point of order, Mr. Speaker. I have great respect for your views and constitutional knowledge and for the guidance that we receive but, with great respect, you keep reiterating that the complaint is against the Government and that it is not a matter for you. However, I ask you to reflect upon the need to defend the rights of hon. Members. We are discussing the Report stage, and we will presumably also debate the Third Reading of a four clause Bill. It is an enabling Bill. In order to put flesh upon it, the Government, in their wisdom, or otherwise, have provided information to the House regarding their intentions.
During the Committee stage, the Government produced a large number of documents, to some of which hon. Members have access, including volume 1 of the Touche Ross report. There was also access, on a restricted basis, to volumes 2 and 3. The documents that were placed in the Library today are either important or unimportant. The Government thought that they were so important that they placed them in the Library. In order to protect the interests of the House, hon. Members are entitled to ask for your support, Mr. Deputy Speaker, in seeking an opportunity to examine the documents.
The Bill was amended in Standing Committee D. It says:
Ordered, by the House of Commons, to be Printed, 18 March 1986.
It also says:
Presented by Mr. Secretary Heseltine …Mr. Secretary Brittan.
Neither of them now holds office. This point ought, perhaps, to have caught my eye earlier, but I ask you now to pronounce on the authenticity of the document and to say whether it is in order that the names of the right hon. Member for Henley (Mr. Heseltine) and the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) should appear on the face of the Bill as presenting it for Report and Third Reading since they no longer hole the positions set out on the face of the Bill. Therefore, the Bill that is now before the House is not in my view accurate.

5 pm

Mr. Deputy Speaker: As far as the presentation is concerned, as the hon. Member knows, the names mentioned were those of the Ministers who presented the Bill in the first place. I understand the concern but, if we are talking about protecting Members, and so on, it is in their best interests to allow the right hon. Member for Llanelli (Mr. Davies) to propose the new clause. The exchanges have been heared and I have no doubt that, according to custom, all sorts of other exchanges will take place. I see no reason at all why we should not get on with new clause 1, which has been tabled by the Opposition and which the hon. Member wants to propose.

Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. You say that you "can see no reason at all". Perhaps I could give you the reason why, in my view, the Bill cannot possibly proceed.
My hon. Friend the Member for Dunfermline, West (Mr. Douglas) made an important point. He said that he


had contacted the Ministry of Defence this morning about documents which were to be placed in the Library and had been informed that those documents would not be available, to use his words, until early this afternoon. The Minister states that he had them made available at the earliest possible opportunity. There is a contradiction there, unless the Minister can explain to the House that there was a reason why those documents, which were published and which we can see here, were not made available this morning when my hon. Friend sought them.

Mr. Deputy Speaker: Order. I may join in deploring conduct, and so on, but what the Minister said or did not say is not for me. It is not a matter for me as far as the proceedings this afternoon are concerned.

Mr. Campbell-Savours: Further to my point of order, I would say that indeed it is a matter for the Chair in so far as the Minister has indicated to the House what his intention was because his actions do not fit his intentions. Yet his actions have a direct bearing on the ability of Members to debate this matter.
Further to that, Mr. Deputy Speaker, may I refer you to the undertaking given by the Minister in Standing Committee D on 13 March. He said:
The Government's plans are about more than profit and loss. I shall not follow the right hon. Member for Llanelli (Mr. Davies) down the path that he took on costings.
The crucial word is "costings", because we have a whole series of amendments which deal, as I understand it, with that matter. The Minister went on:
It is not relevant to the Bill. But, as I said last Tuesday, the House will be able to debate on Third Reading the policy issues, including questions of costings".
Then he said, as an addendum to his statement,
on which the Public Accounts Committee may by then have reported."—[Official Report, Standing Committee D, 13 March 1986; c. 777.]
It was clear at that stage: during the course of the Committee's proceedings that the Minister's way of dealing with the amendments was to draw attention to the fact that when those matters were to be debated on the Floor of the House there would be information available to Members of the House. That information is not available. In other words, the Minister effectively misled the Committee into believing that information would be made available. He may shake his head, but the record is there in Hansard. It is very clear from what he said that he intended that information on the question of costings to be made available to the House. It is not available, and it is on that basis—

Mr. Deputy Speaker: The hon. Member may feel that the Minister has not honoured certain undertakings, but that is a matter for debate; it is not a matter for me. I really think that we ought to get on and proceed with new clause 1.

Mr. Denzil Davies: Further to that point of order, Mr. Deputy Speaker. My hon. Friend the Member for Dunfermline, West (Mr. Douglas) made a very important point when he said that he was told by an official at the Ministry of Defence that he could not see the documents until 2.30 this afternoon. In view of that statement, we need to be told by the Minister of State whether that was indeed the case.

Mr. Deputy Speaker: That is a matter for the Minister of State; it is not a matter for me.

Mr. Davies: But it does affect the conduct of this debate because we are raising points of order that relate to documents that really should have been made available to the House before now. This is a four-clause Bill. It is a piece of enabling legislation. Most of the legislation—if I can use that word—takes place outside the Bill. It takes place in contracts, articles of association, invitations to tender, reports made by management consultants such as Touche Ross. It takes place in reports that we were not allowed to see in the Committee, that even hon. Members for constituencies where the dockyards are located, Rosyth and Plymouth, Devonport, were not allowed to see. This is an unusual Bill in that it does not contain much of the information that is needed to debate the Bill.
New clause 1 deals with costings, new clause 2 deals with foreign ownership, new clause 3 deals with redundancy payments. Many of these matters are dealt with in these very documents. The document about the scheduling and valuation of assets is crucial to new clause 1. It is not possible to determine whether there will eventually be profit or loss until we know what the value of the assets is. New clause 1 calls for a balance sheet, a report before the House of Commons. Without some kind of indication from the Government this is not possible.
The business of the House was determined in respect of this Bill before the Easter vacation. The agreements were made then. There was plenty of time from the beginning of the vacation to last week for these documents to be placed in the Library of the House. So I think that the Minister should tell us whether there was a policy decision that these documents were commercially confidential and could not be allowed into the Library of the House before the last minute, that they must be treated like quasi-secret budget documents. That is the issue at stake.
This Bill is open-ended. There is no guillotine on it. There was no guillotine in Committee. Therefore, it is quite possible for this debate to continue for most of today and, indeed, into tomorrow. There is no pressure of time.
What we are asking is that consideration be given to allowing an adjournment to enable us to look at these documents—documents which appeared in the Library of the House only 30 minutes before this debate was scheduled to take place. This would give us an opportunity to study them and see how germane they are to the new clauses we are debating. Then perhaps we could come back and start debating those clauses. We are merely asking for time to enable us to debate these new clauses properly.

Mr. Foot: Further to the points of order that have been put to you, Mr. Deputy Speaker. I certainly appreciate, as I think every Member of the House appreciates, the difficulty in which you are placed because you are asked to deal with a matter that is primarily a question for the Government.
This is an extraordinary state of affairs. We have had one short intervention from the Government when these points of order were being raised on matters concerning the proper conduct of this debate. We now have an unprecedented state of affairs. The Secretary of State in charge of the Bill looked in for a few minutes, but then he skedaddled; he seems to have gone off. He is not taking


any responsibility although his name is certainly on the back of the Bill, whatever names have been removed. For the Secretary of State for Defence to look in for a few minutes, see that there is some trouble over a Bill for which he is primarily responsible and then run away is, I think, appalling.
We also had for a minute or so the presence of the Patronage Secretary. He should know what the situation is.
It is intolerable that the Government should think that they can continue with this Bill without the Leader of the House being brought here to say how we are to proceed upon it. For the very reason that you have underlined, Mr. Deputy Speaker, that you are put in such difficulties in the matter, I think it behoves the Minister himself to make a fresh statement. Surely he must understand that the Bill cannot properly be discussed in the circumstances in which he has presented it to the House of Commons. It is to him and to the Government that our main demands are made. We believe that the Government should take the procedural step of asking for an adjournment of the House. If that happened, matters could proceed in an orderly fashion.

Dr. Owen: Further to that point of order, Mr. Deputy Speaker. In the time that has elapsed during this discussion, it has become clear that the draft memorandum and articles of association of the dockyard company have been submitted to the House through annexe 4.1 to this document. Therefore, the third crucial document is available, although only in draft form, in an annexe to the tendering documents. That is a further argument on which the Government should reflect.
It is extraordinarily difficult to discuss the Bill and the corporate structure of the dockyards without having considered the articles of association which in Committee the Minister made clear he hoped to publish. The draft documents are now available, although I have not yet been able to get hold of the annexe in the time available to me. I assure the House that they were not filched, but given with the full authorisation of the lady librarian to me in my capacity as a constituency Member in order to carry out what we hope will he a serious examination of the legislation.
As the right hon. Member for Blaenau Gwent (Mr. Foot) said, you are in an extremely difficult position, Mr. Deputy Speaker. Everyone is aware that this is not a decision for you, and that we are having to use this procedural device to draw attention to the Government's problem. It would help us greatly if the Minister or the Parliamentary Under-Secretary of State would come to the Dispatch Box and explain how we should proceed.
The right hon. Member for Llanelli (Mr. Davies) made it clear that he conducted the business in Committee, ably assisted by my hon. Friend the Member for Portsmouth, South (Mr. Hancock), through consent. There were no problems and there was no timetabling. We are not in a mood to create difficulties for the Government. If they wish to reintroduce the matter on another day, the business of the House can be proceeded with on an arranged basis. I am a little sceptical about a short adjournment because the more we look at the documents, the longer we shall need to consider them. Business could be arranged through the usual channels. I understand that there is an order on general practice expenses to be debated after this matter,

and the House could well examine it. It is not as if all the Government's business would fall if this business were withdrawn.
In that spirit, we should like the Minister to answer. You, Mr. Deputy Speaker, have valiantly sought to direct the attention to the Government, but, as yet, the Minister has not felt able to come to the Dispatch Box, apart from his rather short interjection. If the Minister will explain how he intends to proceed, I am sure that we would all be grateful. We should like to hear how he anticipates proceeding. Otherwise, this will take rather a long time.

Mr. Deputy Speaker: I am sure that an adjournment of 15 or 20 minutes would satisfy nobody. I have listened carefully and we have had a long time for substantial representations to be made. They have been made strongly, and a period of reflection has undoubtedly been made available to Government Members. I do not wish to take any further points of order on this matter. I have heard all that I want to hear. I am sure that we should proceed with new clause 1, and then we shall hear the Minister's reply.

Mr. Campbell-Savours: I beg to move, That strangers do withdraw.

Notice being taken that strangers were present, MR. DEPUTY SPEAKER, pursuant to Standing Order No. 136 (Withdrawal of strangers from House), put forthwith the Question, That strangers do withdraw:—

The House divided: Ayes 110, Noes 259.

Division No. 118]
[5.14 pm


AYES


Adams, Allen (Paisley N)
Fields, T. (L'pool Broad Gn)


Archer, Rt Hon Peter
Fisher, Mark


Ashley, Rt Hon Jack
Foot, Rt Hon Michael


Banks, Tony (Newham NW)
Forrester, John


Barnett, Guy
Foster, Derek


Barron, Kevin
Foulkes, George


Beckett, Mrs Margaret
Fraser, J. (Norwood)


Bennett, A. (Dent'n &amp; Red'sh)
Gilbert, Rt Hon Dr John


Bidwell, Sydney
Gourlay, Harry


Blair, Anthony
Hamilton, James (M'well N)


Boothroyd, Miss Betty
Hamilton, W. W. (Fife Central)


Boyes, Roland
Harman, Ms Harriet


Brown, Gordon (D'f'mline E)
Hattersley, Rt Hon Roy


Brown, Hugh D. (Provan)
Haynes, Frank


Brown, N. (N'c'tle-u-Tyne E)
Home Robertson, John


Brown, Ron (E'burgh, Leith)
Hughes, Dr Mark (Durham)


Buchan, Norman
Hughes, Robert (Aberdeen N)


Caborn, Richard
Hughes, Roy (Newport East)


Callaghan, Jim (Heyw'd &amp; M)
Hughes, Sean (Knowsley S)


Campbell-Savours, Dale
John, Brynmor


Clark, Dr David (S Shields)
Kaufman, Rt Hon Gerald


Clarke, Thomas
Lambie, David


Clay, Robert
Leighton, Ronald


Clelland, David Gordon
Litherland, Robert


Cocks, Rt Hon M. (Bristol S)
McKay, Allen (Penistone)


Cook, Frank (Stockton North)
McTaggart, Robert


Corbett, Robin
McWilliam, John


Craigen, J. M.
Madden, Max


Cunliffe, Lawrence
Marek, Dr John


Dalyell, Tam
Martin, Michael


Davies, Rt Hon Denzil (L'lli)
Mason, Rt Hon Roy


Davies, Ronald (Caerphilly)
Maxton, John


Deakins, Eric
Maynard, Miss Joan


Dixon, Donald
Michie, William


Eadie, Alex
Mikardo, Ian


Eastham, Ken
Miller, Dr M. S. (E Kilbride)


Edwards, Bob (W'h'mpt'n SE)
Morris, Rt Hon A. (W'shawe)


Ewing, Harry
O'Neill, Martin


Fatchett, Derek
Orme, Rt Hon Stanley


Faulds, Andrew
Park, George


Field, Frank (Birkenhead)
Patchett, Terry






Pavitt, Laurie
Strang, Gavin


Pendry, Tom
Thomas, Dr R. (Carmarthen)


Pike, Peter
Thompson, J. (Wansbeck)


Powell, Raymond (Ogmore)
Thorne, Stan (Preston)


Redmond, Martin
Torney, Tom


Rees, Rt Hon M. (Leeds S)
Wardell, Gareth (Gower)


Rogers, Allan
Wareing, Robert


Sheerman, Barry
Weetch, Ken


Sheldon, Rt Hon R.
Wigley, Dafydd


Shore, Rt Hon Peter
Wilson, Gordon


Short, Mrs R.(W'hampt'n NE)
Winnick, David


Skinner, Dennis
Young, David (Bolton SE)


Smith, C.(Isl'ton S &amp; F'bury)



Smith, Rt Hon J. (M'ds E)
Tellers for the Ayes:


Soley, Clive
Mr. Dick Douglas and


Stott, Roger
Mr. Bruce George.




NOES


Adley, Robert
Gardiner, George (Reigate)


Alison, Rt Hon Michael
Gardner, Sir Edward (Fylde)


Alton, David
Garel-Jones, Tristan


Ancram, Michael
Gilmour, Rt Hon Sir Ian


Ashby, David
Goodlad, Alastair


Ashdown, Paddy
Gorst, John


Aspinwall, Jack
Gower, Sir Raymond


Atkins, Rt Hon Sir H.
Grant, Sir Anthony


Atkins, Robert (South Ribble)
Greenway, Harry


Baker, Nicholas (Dorset N)
Gregory, Conal


Beaumont-Dark, Anthony
Griffiths, Sir Eldon


Beith, A. J.
Griffiths, Peter (Portsm'th N)


Best, Keith
Grist, Ian


Biffen, Rt Hon John
Ground, Patrick


Biggs-Davison, Sir John
Hamilton, Hon A. (Epsom)


Body, Sir Richard
Hamilton, Neil (Tatton)


Boscawen, Hon Robert
Hampson, Dr Keith


Bowden, Gerald (Dulwich)
Hancock, Michael


Brandon-Bravo, Martin
Hanley, Jeremy


Brinton, Tim
Hannam, John


Browne, John
Hargreaves, Kenneth


Bruce, Malcolm
Harris, David


Bryan, Sir Paul
Harvey, Robert


Buchanan-Smith, Rt Hon A.
Haselhurst, Alan


Buck, Sir Antony
Hawksley, Warren


Burt, Alistair
Hayes, J.


Carlile, Alexander (Montg'y)
Heathcoat-Amory, David


Carlisle, John (Luton N)
Hill, James


Carlisle, Kenneth (Lincoln)
Hirst, Michael


Carlisle, Rt Hon M. (W'ton S)
Holland, Sir Philip (Gedling)


Cartwright, John
Holt, Richard


Chapman, Sydney
Hordern, Sir Peter


Clark, Sir W. (Croydon S)
Howarth, Alan (Stratf'd-on-A)


Cockeram, Eric
Howarth, Gerald (Cannock)


Colvin, Michael
Howell, Rt Hon D. (G'Idford)


Coombs, Simon
Howell, Ralph (Norfolk, N)


Cope, John
Howells, Geraint


Couchman, James
Hubbard-Miles, Peter


Cranborne, Viscount
Hunter, Andrew


Currie, Mrs Edwina
Jackson, Robert


Dickens, Geoffrey
Jenkin, Rt Hon Patrick


Dorrell, Stephen
Jessel, Toby


Douglas-Hamilton, Lord J.
Jones, Robert (Herts W)


Dover, Den
Jopling, Rt Hon Michael


Durant, Tony
Joseph, Rt Hon Sir Keith


Dykes, Hugh
Kellett-Bowman, Mrs Elaine


Emery, Sir Peter
Key, Robert


Eyre, Sir Reginald
Kilroy-Silk, Robert


Fairbairn, Nicholas
King, Roger (B'ham N'field)


Fallon, Michael
Kirkwood, Archy


Farr, Sir John
Knight, Dame Jill (Edgbaston)


Favell, Anthony
Knowles, Michael


Fenner, Mrs Peggy
Lamont, Norman


Finsberg, Sir Geoffrey
Lang, Ian


Fookes, Miss Janet
Latham, Michael


Forth, Eric
Lee, John (Pendle)


Fox, Marcus
Leigh, Edward (Gainsbor'gh)


Franks, Cecil
Lennox-Boyd, Hon Mark


Fraser, Peter (Angus East)
Lewis, Sir Kenneth (Stamf'd)


Freeman, Roger
Lilley, Peter


Fry, Peter
Livsey, Richard


Galley, Roy
Lloyd, Peter (Fareham)





Lloyd, Tony (Stretford)
Shaw, Sir Michael (Scarb')


Lord, Michael
Shelton, William (Streatham)


Luce, Rt Hon Richard
Shepherd, Colin (Hereford)


Lyell, Nicholas
Shepherd, Richard (Aldridge)


McCrindle, Robert
Shersby, Michael


McCurley, Mrs Anna
Short, Ms Clare (Ladywood)


MacKay, Andrew (Berkshire)
Silvester, Fred


MacKay, John (Argyll &amp; Bute)
Sims, Roger


McNair-Wilson, M. (N'bury)
Skeet, Sir Trevor


McNair-Wilson, P. (New F'st)
Smith, Tim (Beaconsfield)


Major, John
Soames, Hon Nicholas


Malins, Humfrey
Speed, Keith


Malone, Gerald
Spencer, Derek


Maples, John
Spicer, Jim (Dorset W)


Marlow, Antony
Spicer, Michael (S Worcs)


Mates, Michael
Squire, Robin


Mather, Carol
Stanbrook, Ivor


Maxwell-Hyslop, Robin
Stanley, Rt Hon John


Mayhew, Sir Patrick
Steel, Rt Hon David


Meadowcroft, Michael
Steen, Anthony


Mellor, David
Stern, Michael


Merchant, Piers
Stevens, Lewis (Nuneaton)


Meyer, Sir Anthony
Stewart, Allan (Eastwood)


Miller, Hal (B'grove)
Stewart, Andrew (Sherwood)


Mills, Iain (Meriden)
Stewart, Ian (Hertf'dshire N)


Mills, Sir Peter (West Devon)
Stokes, John


Miscampbell, Norman
Stradling Thomas, Sir John


Mitchell, David (Hants NW)
Sumberg, David


Moate, Roger
Tapsell, Sir Peter


Monro, Sir Hector
Taylor, John (Solihull)


Montgomery, Sir Fergus
Taylor, Teddy (S'end E)


Moore, Rt Hon John
Tebbit, Rt Hon Norman


Morrison, Hon C. (Devizes)
Temple-Morris, Peter


Moynihan, Hon C.
Terlezki, Stefan


Mudd, David
Thatcher, Rt Hon Mrs M.


Neale, Gerrard
Thompson, Patrick (N'ich N)


Nelson, Anthony
Thorne, Neil (Ilford S)


Neubert, Michael
Thurnham, Peter


Newton, Tony
Townsend, Cyril D. (B'heath)


Nicholls, Patrick
Tracey, Richard


Norris, Steven
Trippier, David


Onslow, Cranley
van Straubenzee, Sir W.


Ottaway, Richard
Viggers, Peter


Owen, Rt Hon Dr David
Waddington, David


Page, Richard (Herts SW)
Wainwright, R.


Parris, Matthew
Wakeham, Rt Hon John


Patten, J. (Oxf W &amp; Abgdn)
Walden, George


Pawsey, James
Walker, Bill (T'side N)


Penhaligon, David
Wall, Sir Patrick


Percival, Rt Hon Sir Ian
Wallace, James


Pollock, Alexander
Waller, Gary


Porter, Barry
Ward, John


Powell, William (Corby)
Wardle, C. (Bexhill)


Prentice, Rt Hon Reg
Warren, Kenneth


Proctor, K. Harvey
Watts, John


Rathbone, Tim
Wells, Bowen (Hertford)


Rees, Rt Hon Peter (Dover)
Wheeler, John


Rhodes James, Robert
Whitney, Raymond


Rhys Williams, Sir Brandon
Wiggin, Jerry


Richardson, Ms Jo
Wilkinson, John


Ridley, Rt Hon Nicholas
Winterton, Nicholas


Robinson, Mark (N'port W)
Wolfson, Mark


Roe, Mrs Marion
Wood, Timothy


Rooker, J. W.
Woodcock, Michael


Rowe, Andrew
Yeo, Tim


Rumbold, Mrs Angela



Ryder, Richard
Tellers for the Noes:


Sackville, Hon Thomas
Mr. Donald Thompson and


St. John-Stevas, Rt Hon N.
Mr. Francis Maude.


Shaw, Giles (Pudsey)

Question accordingly negatived.

Mr. Denzil Davies: On a point of order, Mr. Deputy Speaker. The House has voted, and I understand that the Leader of the House is fairly close to the Division Lobbies. I now seek a statement from him about why the Government placed these important documents in the Library of the House less than one hour before the debate


was due to take place. I remind the House that we are discussing a four-clause Bill; indeed, three of those clauses are little longer than two or three lines. We are debating enabling legislation, and this House has traditionally been suspicious and most concerned about such legislation.
The background to this is that, until numerous documents are studied, it is extremely difficult for the House to debate fully the difficult questions involved. As one example, I refer to the cost of privatising the royal dockyards. One document placed in the Library but half an hour before the debate was due to start sets out a schedule of the assets which will still be held by the Ministry of Defence but the use of which will be given to the private contractor to enable that contractor to operate the dockyards. The valuation placed on those assets and the cost of their use is absolutely crucial in determining questions of profit and loss.
The first new clause is concerned with striking a balance sheet and determining for the benefit of this House and the taxpayer whether the whole operation will result in a loss or gain of money to the taxpayer. Without studying that document, without being able to see what assets will be allowed to be used, leased or granted by licence to the private contractor, and without seeing what price will be put on these obligations, it is impossible for this House to consider new clause 1.
New clause 2 is concerned with foreign ownership of the dockyards and with the share structure of the different companies. I am told that two, three or four consortia of companies are involved. Again, the share structure of these companies is involved, and the key issue is whether the Government have been able to obtain for themselves the "golden share" control, as used in previous privatisation Bills, because this Bill contains nothing about it. It is also crucial to be able to study the articles of association, because it is impossible to debate new clause 2 fully until we have seen the articles to discover how the Government intend to ensure—if they want to ensure—that these dockyards do not finally fall under foreign control.
5.30 pm
There is a pile of documents called "Invitations to Tender". They will go out to the various companies which will then be allowed to tender for the contract to run the royal dockyards. The documents contain provisions which will be set in those contracts and those provisions must bear upon the three new clauses we shall debate. They must bear upon profit and loss, upon costs to the taxpayer and upon the share structure of the different companies.
New clause 3 is concerned with redundancy payments and pensions. I should have thought that the contracts must refer to the provisions regarding redundancies and pensions. We were told in Committee that, apparently, the Ministry of Defence would pay the pensions of the employees who had been transferred from the public to the private sector. We were told that, apparently, the contracts would contain provisions whereby the private contractor would have to add to the sum he would charge the Ministry of Defence to provide a proper pension comparable to the pensions provided in the public sector.
We are not asking for the contracts—we are asking to be allowed to see the invitations to tender. Many of the details are contained in these documents. A large number of the documents to which reference was made in

Committee were considered to be secret or in confidence commercially and Committee members were not allowed to see them. The House will not be allowed to see them until the Bill becomes law.
It is not just a matter of documents not being available until within the last few hours. We are concerned with enabling legislation, which depends for its understanding and debate on a vast number of documents which have not been available to the House. When we debated the matters in Committee, we accepted Ministers' assurances in good faith. They told us, "These documents will be available for debate on the Floor of the House." We did not think that they would be made available only half an hour before the House was due to debate them. That is the burden of our complaint.
The documents could have been made available long before today. We have had the Easter recess. The documents could have been made available two or three weeks ago. It is no good the Under-Secretary of State for Defence Procurement shaking his head. He should tell the House why it was not possible to make the documents available. The Minister of State said that he could not do so because he gave them to the companies on 3 April. Time and time again, in the interests of the companies, their directors and outside parties, that is what happened with documents of paramount importance to Committee members. That is why we accepted the assurances that the documents would be provided. All the documents have still not been provided, but I think that most of those we were promised are here by now. They were available only half an hour ago and we have not, therefore, had an opportunity to study them before debating this important legislation.
This is not just another privatisation Bill. It transfers the operations of the royal dockyards from the public domain into the private sector. The Bill affects the livelihoods, pensions, redundancy payments and working practices of thousands of employees in Rosyth and Plymouth, Devonport. Because of the importance of these documents to this enabling legislation, which comprises four clauses—a skeletal piece of legislation—the Leader of the House should come to the Dispatch Box and tell us that the Bill will be withdrawn today, and will be brought back in a few days time. The Bill comprises only four clauses. It could certainly be dealt with next week without too much difficulty. If we had the documents, we could deal more rapidly with the Bill. If we do not have them, it will be much more difficult for us to deal with the clauses.
The Leader of the House should explain why we did not get the documents until half an hour before the debate was due to start. He should tell us that there is no urgency and that it will be possible to bring the Bill back next week. When we have had a chance to study the documents and to table amendments, the matter can be properly debated.

Mr. Deputy Speaker: Ministers have heard that request and submission. This is a matter not for me but for the Ministers concerned.

Mr. Douglas: On a point of order, Mr. Deputy Speaker.

Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. I shall not take any more points of order on the lack of documents. We must continue with the business.

Mr. Douglas: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Is it a different point of order?

Mr. Douglas: I ask you to reflect on your own words, Mr. Deputy Speaker. You said that you were not willing to take further points of order on the lack of documents. My point of order concerns not the lack but the superfluity of documents. With respect—

Mr. Deputy Speaker: Order. The hon. Member knows very well that we are talking about the lack of documents, whether they are the right documents, and so on. I am not prepared to take any more points of order on that matter. We must get on to the debate.

Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. Is it a different point of order?

Mr. Campbell-Savours: Yes, I want to raise a point of order about the position in which you find yourself when the Government take a particular approach to our procedures. In the past hour and a half, you have had to sit through a series of points of order. You have suggested repeatedly that those matters can be dealt with only by Ministers, especially the Leader of the House. It is clear that you believe that in your role as the protector of Members' rights you must, to some extent, rely upon Ministers fulfilling their responsibilities in the exercise of our procedures. Not once in the past one and a half hours—

Mr. Deputy Speaker: Order. The hon. Member is pursuing the issue which has been before the House for an hour and a half. I am not prepared to take any further points of order on that subject.

Mr. Campbell-Savours: It is a completely different matter.

Mr. Deputy Speaker: Order. The business will proceed better if hon. Members take note of the Chair.

Mr. McWilliam: I beg to move, That further consideration of the Bill, as amended, be now adjourned.

Mr. Deputy Speaker: I am prepared to accept the motion. Because the arguments have been raised over a considerable period, I shall use my powers to put the Question forthwith.

Question put:

The House divided: Ayes 169, Noes 239.

Division No. 119]
[5.39 pm


AYES


Adams, Allen (Paisley N)
Blair, Anthony


Alton, David
Boothroyd, Miss Betty


Archer, Rt Hon Peter
Boyes, Roland


Ashdown, Paddy
Brown, Gordon (D'f'mline E)


Ashley, Rt Hon Jack
Brown, N. (N'c'tle-u-Tyne E)


Atkinson, N. (Tottenham)
Brown, Ron (E'burgh, Leith)


Bagier, Gordon A. T.
Bruce, Malcolm


Banks, Tony (Newham NW)
Buchan, Norman


Barnett, Guy
Caborn, Richard


Barron, Kevin
Callaghan, Rt Hon J.


Beckett, Mrs Margaret
Callaghan, Jim (Heyw'd &amp; M)


Beith, A. J.
Campbell, Ian


Bell, Stuart
Campbell-Savours, Dale


Benn, Rt Hon Tony
Canavan, Dennis


Bennett, A. (Dent'n &amp; Red'sh)
Carlile, Alexander (Montg'y)


Bidwell, Sydney
Cartwright, John





Clark, Dr David (S Shields)
McKelvey, William


Clarke, Thomas
McTaggart, Robert


Clay, Robert
McWilliam, John


Clelland, David Gordon
Madden, Max


Clwyd, Mrs Ann
Marek, Dr John


Cocks, Rt Hon M. (Bristol S)
Martin, Michael


Cook, Frank (Stockton North)
Mason, Rt Hon Roy


Corbett, Robin
Maxton, John


Corbyn, Jeremy
Maynard, Miss Joan


Craigen, J. M.
Meacher, Michael


Crowther, Stan
Meadowcroft, Michael


Dalyell, Tam
Michie, William


Davies, Rt Hon Denzil (L'lli)
Mikardo, Ian


Davies, Ronald (Caerphilly)
Millan, Rt Hon Bruce


Davis, Terry (B'ham, H'ge H'l)
Miller, Dr M. S. (E Kilbride)


Deakins, Eric
Morris, Rt Hon A. (W'shawe)


Dewar, Donald
Morris, Rt Hon J. (Aberavon)


Dixon, Donald
Nellist, David


Douglas, Dick
O'Neill, Martin


Dubs, Alfred
Orme, Rt Hon Stanley


Duffy, A. E. P.
Owen, Rt Hon Dr David


Eadie, Alex
Park, George


Eastham, Ken
Parry, Robert


Evans, John (St. Helens N)
Patchett, Terry


Ewing, Harry
Pavitt, Laurie


Fatchett, Derek
Pendry, Tom


Faulds, Andrew
Penhaligon, David


Field, Frank (Birkenhead)
Pike, Peter


Fields, T. (L'pool Broad Gn)
Powell, Raymond (Ogmore)


Flannery, Martin
Radice, Giles


Foot, Rt Hon Michael
Randall, Stuart


Forrester, John
Redmond, Martin


Foster, Derek
Rees, Rt Hon M. (Leeds S)


Foulkes, George
Richardson, Ms Jo


Fraser, J. (Norwood)
Roberts, Allan (Bootle)


George, Bruce
Robertson, George


Gilbert, Rt Hon Dr John
Rogers, Allan


Godman, Dr Norman
Rooker, J. W.


Gould, Bryan
Ross, Stephen (Isle of Wight)


Gourlay, Harry
Sedgemore, Brian


Hamilton, James (M'well N)
Sheerman, Barry


Hamilton, W. W. (Fife Central)
Sheldon, Rt Hon R.


Hancock, Michael
Shore, Rt Hon Peter


Harman, Ms Harriet
Short, Ms Clare (Ladywood)


Hart, Rt Hon Dame Judith
Short, Mrs R.(W'hampt'n NE)


Hattersley, Rt Hon Roy
Silkin, Rt Hon J.


Haynes, Frank
Skinner, Dennis


Healey, Rt Hon Denis
Smith, C.(Isl'ton S &amp; F'bury)


Home Robertson, John
Smith, Rt Hon J. (M'ds E)


Howell, Rt Hon D. (S'heath)
Soley, Clive


Howells, Geraint
Steel, Rt Hon David


Hoyle, Douglas
Stott, Roger


Hughes, Dr Mark (Durham)
Strang, Gavin


Hughes, Robert (Aberdeen N)
Thomas, Dr R. (Carmarthen)


Hughes, Roy (Newport East)
Thompson, J. (Wansbeck)


Hughes, Sean (Knowsley S)
Tinn, James


Jenkins, Rt Hon Roy (Hillh'd)
Torney, Tom


John, Brynmor
Wainwright, R.


Kaufman, Rt Hon Gerald
Wallace, James


Kennedy, Charles
Wardell, Gareth (Gower)


Kilroy-Silk, Robert
Wareing, Robert


Kirkwood, Archy
Weetch, Ken


Lambie, David
White, James


Lamond, James
Wigley, Dafydd


Leighton, Ronald
Wilson, Gordon


Lewis, Terence (Worsley)
Winnick, David


Litherland, Robert
Young, David (Bolton SE)


Livsey, Richard



Lloyd, Tony (Stretford)
Tellers for the Ayes:


McCartney, Hugh
Mr. Lawrence Cunliffe and


McKay, Allen (Penistone)
Mr. Mark Fisher.




NOES


Alison, Rt Hon Michael
Beaumont-Dark, Anthony


Ancram, Michael
Best, Keith


Ashby, David
Biffen, Rt Hon John


Aspinwall, Jack
Biggs-Davison, Sir John


Atkins, Rt Hon Sir H.
Body, Sir Richard


Atkins, Robert (South Ribble)
Boscawen, Hon Robert


Baker, Nicholas (Dorset N)
Bowden, Gerald (Dulwich)






Brandon-Bravo, Martin
Hubbard-Miles, Peter


Brinton, Tim
Hunter, Andrew


Browne, John
Jackson, Robert


Bryan, Sir Paul
Jenkin, Rt Hon Patrick


Buchanan-Smith, Rt Hon A.
Jessel, Toby


Buck, Sir Antony
Jones, Robert (Herts W)


Burt, Alistair
Jopling, Rt Hon Michael


Carlisle, John (Luton N)
Joseph, Rt Hon Sir Keith


Carlisle, Kenneth (Lincoln)
Kellett-Bowman, Mrs Elaine


Carlisle, Rt Hon M. (W'ton S)
Key, Robert


Chapman, Sydney
King, Roger (B'ham N'field)


Chope, Christopher
Knight, Dame Jill (Edgbaston)


Clark, Sir W. (Croydon S)
Knowles, Michael


Cockeram, Eric
Lamont, Norman


Colvin, Michael
Lang, Ian


Coombs, Simon
Latham, Michael


Cope, John
Lee, John (Pendle)


Couchman, James
Leigh, Edward (Gainsbor'gh)


Cranborne, Viscount
Lennox-Boyd, Hon Mark


Currie, Mrs Edwina
Lester, Jim


Dickens, Geoffrey
Lewis, Sir Kenneth (Stamf'd)


Dorrell, Stephen
Lilley, Peter


Douglas-Hamilton, Lord J.
Lloyd, Peter (Fareham)


Durant, Tony
Lord, Michael


Dykes, Hugh
Luce, Rt Hon Richard


Emery, Sir Peter
Lyell, Nicholas


Eyre, Sir Reginald
McCrindle, Robert


Fairbairn, Nicholas
McCurley, Mrs Anna


Fallon, Michael
MacKay, Andrew (Berkshire)


Farr, Sir John
MacKay, John (Argyll &amp; Bute)


Favell, Anthony
McNair-Wilson, M. (N'bury)


Fenner, Mrs Peggy
McNair-Wilson, P. (New F'st)


Finsberg, Sir Geoffrey
Major, John


Fletcher, Alexander
Malins, Humfrey


Fookes, Miss Janet
Malone, Gerald


Forth, Eric
Maples, John


Fox, Marcus
Marlow, Antony


Franks, Cecil
Mates, Michael


Fraser, Peter (Angus East)
Mather, Carol


Freeman, Roger
Maxwell-Hyslop, Robin


Fry, Peter
Mayhew, Sir Patrick


Galley, Roy
Mellor, David


Gardiner, George (Reigate)
Merchant, Piers


Gardner, Sir Edward (Fylde)
Meyer, Sir Anthony


Garel-Jones, Tristan
Miller, Hal (B'grove)


Goodlad, Alastair
Mills, Iain (Meriden)


Gorst, John
Mills, Sir Peter (West Devon)


Gow, Ian
Miscampbell, Norman


Gower, Sir Raymond
Moate, Roger


Grant, Sir Anthony
Monro, Sir Hector


Greenway, Harry
Montgomery, Sir Fergus


Gregory, Conal
Moore, Rt Hon John


Griffiths, Sir Eldon
Morrison, Hon C. (Devizes)


Griffiths, Peter (Portsm'th N)
Moynihan, Hon C.


Grist, Ian
Mudd, David


Ground, Patrick
Neale, Gerrard


Hamilton, Hon A. (Epsom)
Nelson, Anthony


Hamilton, Neil (Tatton)
Neubert, Michael


Hampson, Dr Keith
Newton, Tony


Hanley, Jeremy
Nicholls, Patrick


Hannam, John
Norris, Steven


Hargreaves, Kenneth
Onslow, Cranley


Harris, David
Oppenheim, Phillip


Harvey, Robert
Ottaway, Richard


Haselhurst, Alan
Page, Richard (Herts SW)


Hawkins, C. (High Peak)
Parkinson, Rt Hon Cecil


Hawksley, Warren
Parris, Matthew


Hayes, J.
Patten, J. (Oxf W &amp; Abgdn)


Heathcoat-Amory, David
Pawsey, James


Henderson, Barry
Percival, Rt Hon Sir Ian


Hill, James
Pollock, Alexander


Hind, Kenneth
Porter, Barry


Hirst, Michael
Powell, William (Corby)


Holland, Sir Philip (Gedling)
Prentice, Rt Hon Reg


Holt, Richard
Proctor, K. Harvey


Hordern, Sir Peter
Rathbone, Tim


Howarth, Alan (Stratf'd-on-A)
Rees, Rt Hon Peter (Dover)


Howarth, Gerald (Cannock)
Rhodes James, Robert


Howell, Rt Hon D. (G'Idford)
Rhys Williams, Sir Brandon


Howell, Ralph (Norfolk, N)
Ridley, Rt Hon Nicholas





Robinson, Mark (N'port W)
Temple-Morris, Peter


Roe, Mrs Marion
Terlezki, Stefan


Rowe, Andrew
Thompson, Patrick (N'ich N)


Rumbold, Mrs Angela
Thorne, Neil (Ilford S)


Ryder, Richard
Thurnham, Peter


Sackville, Hon Thomas
Townend, John (Bridlington)


Shaw, Giles (Pudsey)
Townsend, Cyril D. (B'heath)


Shaw, Sir Michael (Scarb')
Tracey, Richard


Shelton, William (Streatham)
Trippier, David


Shepherd, Colin (Hereford)
van Straubenzee, Sir W.


Shepherd, Richard (Aldridge)
Viggers, Peter


Shersby, Michael
Waddington, David


Silvester, Fred
Wakeham, Rt Hon John


Sims, Roger
Walden, George


Skeet, Sir Trevor
Walker, Bill (T'side N)


Smith, Tim (Beaconsfield)
Wall, Sir Patrick


Soames, Hon Nicholas
Waller, Gary


Spencer, Derek
Ward, John


Spicer, Jim (Dorset W)
Wardle, C. (Bexhill)


Spicer, Michael (S Worcs)
Warren, Kenneth


Squire, Robin
Watts, John


Stanbrook, Ivor
Wells, Bowen (Hertford)


Stanley, Rt Hon John
Wheeler, John


Steen, Anthony
Whitney, Raymond


Stern, Michael
Wiggin, Jerry


Stevens, Lewis (Nuneaton)
Wilkinson, John


Stewart, Allan (Eastwood)
Winterton, Nicholas


Stewart, Andrew (Sherwood)
Wolfson, Mark


Stokes, John
Wood, Timothy


Stradling Thomas, Sir John
Woodcock, Michael


Sumberg, David
Yeo, Tim


Tapsell, Sir Peter



Taylor, John (Solihull)
Tellers for the Noes:


Taylor, Teddy (S'end E)
Mr. Francis Maude and


Tebbit, Rt Hon Norman
Mr. Donald Thompson.

Question accordingly negatived.

Mr. Denzil Davies: Despite the lateness of the documents coming to the Library, I shall endeavour again to argue for the new clause which I moved some time ago. In effect, the new clause proposes that a report be placed before the House of Commons itemising all the costs and savings, if any, which we doubt, which will arise as a result of what has been an ill-conceived and speculative exercise in attempting to turn the royal dockyards into a private venture.
Ministers have been reluctant to talk much about costs. Information was dragged out of them towards the end of the Committee stage of the Bill. The Under-Secretary became a bit tetchy and did not want to talk about that, although he said that there might be a report from the Property Services Agency on these matters which could be debated. But we have not yet had that report, although there have been surmises in the press on its contents.
First, what savings or costs will fall on the budget of the Ministry of Defence as a result of this operation and, secondly, what costs or savings will fall upon the Exchequer in general? First, let me deal with the Ministry of Defence's budget. On the Government's figures we have calculated that over a 10-year period from the start of privatisation — I accept that 10 years is a highly speculative period, during which time anything could happen, but that is the period that the Government have used for amortising costs—there will be a loss to the Ministry of Defence's budget of about £20 million a year. If we are wrong, no doubt the Minister will tell us when he replies. That comes to £200 million. That is a conservative estimate and I shall return to the way in which it has been arrived at. I need not remind the Minister that £200 million would almost buy two type 23 frigates or


eight, nine or perhaps even 10 Tornadoes. That is the nature of the loss that will fall upon the Ministry of Defence over that period.
We know that right at the beginning large payments will have to be made. We have been told that at the beginning there will be a cost of £70 million. Part of that cost will be the cost of redundancy and of setting up the scheme —the accountancy and financial measures that have to be taken. I understand that part of that cost is to some extent the refurbishment of fixed assets. The initial cost of setting up this privatisation is an extraordinary figure. The turnover of the dockyards ranges between £400 million and £500 million. The £70 million that will have to be found almost immediately is almost 20 per cent. of the dockyards' turnover. That is an extraordinary position for the Government to be in. I have not checked, but I should be surprised if any of the other privatisation measures involving far more money attracted an initial cost of £70 million. That money has to be found. I do not think that it will all come from the Ministry of Defence's budget. I understand that some will come from the Civil Service pension and redundancy fund. But £70 million will have to be found almost immediately.
On top of that, £200 million will have to be found for the transfer of the pension scheme to the private employer. I accept that that money relates to liabilities that would in any case have accrued and would have to be paid for in future. In that £200 million figure we have not,included the cost of any future redundancies. It is a conservative figure. We shall debate a redundancy fund when we come to new clause 3.
It was not clear in Committee what Ministers intended, but they said that the private employer, the management company, was hoping that the redundancy payment would be more or less similar to what would be paid by the Civil Service. If that is the case, where wiil the money come from? Will money for redundancies come from the Ministry of Defence in the same way as the money for pensions? In other words, will the contractor charge a bit more? The contractor does not have the money; he has only the contract with the Ministry of Defence and his only income is from progress payments from the Ministry of Defence. If the contractor wants to declare another 2,500 employees redundant in the two or three weeks or month after privatisation, where will he find the money for the redundancy payments to replicate—that was the word used in Committee—the kind of payments that would be paid by the Civil Service?
6 pm
We have not included redundancy payments in the cost of £200 million over 10 years. Nor have we considered the question of emergency work. We did not debate that question very fully in Committee, but we debated it on Second Reading. No calculation seems to have been made of the cost to the Ministry of Defence of emergency work carried out by the private contractor. There was an example last week. HMS Illustrious had sailed little further than the Isle of Wight before it needed emergency work. I understand that that work will be done at the fleet maintenance base at Portsmouth. The costings for work at the maintenance base will be no different from what they are now, and they will not change in future. However, if the work on Illustrious could not have been done at

Portsmouth, presumably the ship would have had to go back to Plymouth. The work must be done in a rush because Illustrious has to proceed to wherever it is going.
If the work was to he done at Plymouth, there would presumably be negotiations between the Ministry of Defence—the new outfit that is to be set up in Bath or somewhere — and private industry. What kind of negotiations would there be? Would the Ministry of Defence be in any position to tell the private contractor that it was charging too much, and in consequence to keep Illustrious anchored for a year off the Isle of Wight instead of sending it to join all the other fine ships of the American fleet in the south Pacific? Of course not. The Ministry of Defence would have to pay for the repairs, and pay through the nose. In our very conservative figure of the loss of £200 million to the Ministry of Defence budget over 10 years, we do not take into account the cost of doing such work.
Thirdly, we have not taken into account the recommendations of the 19 working parties. Where are those recommendations? Perhaps we will see them before these matters are debated in the House of Lords. Working parties are bound to make recommendations, and I am sure that the recommendations will cost money. Those costs, too, will have to be found from the budget of the Ministry of Defence. I doubt whether the Minister of State can give us an undertaking that the Treasury will foot the bill. There will be the cost, for instance, of carrying out the recommendations of the working party on nuclear safety. Costs may well result from the splitting of responsibility between the Ministry of Defence and the private contractor. That and other recommendations of the 19 working parties may result in a cost of £X million and that money will have to be found from the budget of the Ministry of Defence.
Our figure of £200 million is a conservative estimate which takes no account of emergency work, redundancy payments—which may at the end of the day fall upon the Ministry of Defence—or of the extra cost arising from the recommendations of the working parties.
The Government have made some assertions about the effect on the Exchequer as a whole. The Minister of State gave us some figures on Second Reading, although he himself admitted that they were more like guesses. We know that nothing will be saved for the budget of the Ministry of Defence and that, in fact, there will be costs to that budget. I hope that the Minister will confirm that. However, there is apparently a magic wand to be waved. Apparently, at the end of the day, when the profits and losses have been calculated and the Parliamentary Under-Secretary of State has worked on the balance sheet as he used to in that back street accountancy practice in Manchester, there will be a profit figure of some kind. It will be a profit to the Exchequer for the greater good. The Defence Ministers will have subjugated their departmental duties to the greater good of the fisc. They were not operating in the Committee as departmental Ministers. They were operating for the Exchequer. No doubt the Treasury Ministers are very grateful to them.
How much will be saved for the Exchequer? The difficulty is that the figure keeps changing. The original figure was £26 million. That was the speculative figure suggested last June. That figure rapidly fell to £23 million in November. As we have not had the report of the Public Accounts Committee, we have to rely on what we can glean from statements. The figure for the amount by which


the taxpayer will benefit fell again in February by the wondrously precise figure of £2 million, leaving a figure of £21 million. What is the figure now? We should be told. We have moved on since February and no doubt there are other costings to be taken into account. Has there been any further change in the figure?
Apparently, there is to be a saving of £21 million over the period of 10 years over which initial costs are to be amortised, although the initial costs are only part of the total exercise. Apparently, over that period about £21 million is to be saved every year. Let us consider how that figure was arrived at. No doubt the Minister of State will correct me—he has all the papers—but I understand that the figure was worked out as follows. First, there are the actual savings. There will be a reduction in personnel, or the sacking of people.
There will be a further saving because the Treasury will not pay the pensions any more. Curiously, although the Exchequer will not pay the pensions, the Ministry of Defence will do so. Pension payments will amount to £8 million or £9 million a year. Under the present arrangement they are paid out of the Civil Service pension fund. After privatisation they can no longer be paid out of that fund. They cannot be paid out of the pension fund of the consortium company or main company that is to run the dockyards because the employees are employed not by that company but by the management company, and the management company has only one contract—the contract with the Ministry of Defence. The effect will be the same as in the case of the redundancy payments. How will the company pay the pensions except by adding to the price which it charges to the Ministry of Defence?
That is what is envisaged. That is why the Under-Secretary has been able to give an assurance that the pensions will not be that different from the pensions paid out of the Civil Service pension scheme. The Exchequer will save about £9 million a year because it will not have to meet the pension payments. However, the Ministry of Defence will have to meet those payments so that the £9 million, or perhaps a little less, will come out of the defence budget. It will not come out of the Exchequer. Therefore, that will be a saving in terms of the grand balance sheet the Government are constructing.
Costs have to be deducted out of savings. As I have said previously, the figure for savings was £26 million, it then came down to £23 million and it is now £21 million. We have seen what the savings will be. Let us consider the costs of the operation to see how we arrive at the figure of £21 million. As I understand it, one figure of costs is for something called a customer organisation. Apparently, new jobs are being created; the Government are actually creating new jobs. The original costs for that customer organisation were envisaged to be £2 million. The Minister of State will correct me if I am wrong. The costs went up and up and are now estimated at £11 million a year.
What is the customer organisation? It will create new jobs, new bureaucrats and more paper to shuffle around. What will the people who will cost the Ministry of Defence £11 million be doing? They are there to negotiate and work out the arrangement between the supplier and the buyer, the private company and the Ministry of Defence, between the monopoly seller and buyer. We need some organisation within the Ministry of Defence to do that work. We do not need it at the moment. There is no need to spend £11 million for people to do that work because it is done within the same organisation. However, once a

commercial organisation has been set up it will be necessary to negotiate with Trafalgar House about the costs of repairing warships, refitting or emergency work on HMS Illustrious or any other ship that has to come into Portsmouth or Rosyth.
Can the Minister of State tell us why, within a year, there has been a 500 per cent. increase in the cost of the so-called customer organisation? I do not know exactly where the organisation will be, but I think that the Under-Secretary will agree that it will probably be in Bath.
It is obscene that the Government have put 2,500 dockyard workers out of work in Rosyth and Devonport in the interests of so-called efficiency. Many of them, if not all of them, work on ships, do things with their hands and have technical skills. They will be put out of work and £11 million a year will be spent on some kind of customer organisation in somewhere like Bath where they will just shuffle paper around because of the operation the Government are setting up. It is obscene that the Government are taking money away from people who work at the dockyards and putting it into the hands of a bureaucratic body, which would not be necessary if the Government did not go ahead with their hare-brained scheme. Therefore, £11 million will be in respect of a new bureaucracy set up as a result of the Government's plans.
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The Ministry of Defence has to make some assessment of the profit that the contractors will make because the profit to the contractor must be a cost to the Ministry of Defence. No doubt those figures are commercially in confidence and, even if I knew them, I would not wish to breach that confidence on the Floor of the House because the Government have to negotiate with the companies. However, my understanding is that the original profit figure was much higher than it is now. The Ministry of Defence or the Government accountancy service, or whoever, have tried, I would not say to fiddle the figures, but to make them look a little better. They have done that by reducing by 35 per cent. the Government's assessment of the profits of contractors for Rosyth and Devonport. That is not a small reduction. We started with one figure in June 1985 and over a period the Government have become more optimistic in terms of the Ministry of Defence because they have scaled down the profit figure by 35 per cent. I do not know what that figure is, but my impression is that it is a fairly low profit figure on a turnover of £400 million or £500 million.
The Minister of State would obviously not wish to tell us what the figures are, but perhaps he could tell us how on earth the Government can scale down the profit figure by 35 per cent. It is very convenient to do so because it reduces the costs. By reducing the costs, it increases the savings and, as I have said, the savings are now £21 million a year. If the figure of profit had not been scaled down, there would have been a substantial cut in those savings. That is why the figure for savings is not worth the paper it is written on. It is a purely speculative statement. The Minister of State knows that, as does the Under-Secretary.
I am sorry to mention Manchester again, but the Manchester accountants had a high reputation within the Labour party at one time. I am sure that the Under-Secretary also had a high reputation. If somebody had brought in the balance sheet which is being presented, he would have thrown it in the waste paper basket in his office


in Manchester. The figures of £21 million, £23 million or £26 million are not worth the calculation. The Government have thought of a figure, put it in a table and found some justification for it. Perhaps the Minister could tell us how he justifies the figure of £21 million.
Frankly, we do not believe that there will be any savings to the Exchequer, or anybody else, as a result of this exercise. There will be costs. Most of them, not all, will fall directly on the Ministry of Defence. Those costs will come out of the defence budget. Money will come out of equipment and items needed for defence and will be spent on bureaucracy and private contractors. Nothing that has been shown to us has dispelled that belief.
We believe that at the end of the day the Navy will get an inferior service and at a higher cost. It is no good the Minister of State shaking his head. He has not produced one figure to dispel that belief. There was a long statement on Second Reading about improved efficiency and improved working methods. Can the Minister of State put one figure on what will be saved from improved efficiency? All he can put a figure on is how much will be saved by sacking 2,500 people. He cannot put a figure on improved efficiency or so-called better working practices. The figures that are being produced have nothing to do with that. They are concerned solely with actual savings and actual costs. No money will be saved. There is no case for privatisation on the ground of saving money. Indeed, money will be lost to the Ministry of Defence. Perhaps the Minister of State will tell us that our figures are wrong and that there will be savings. From what we have seen and heard, there will be no savings. This is purely an ideological kick by the Government. It has nothing to do with saving money. It will cost the country and the armed forces money.

Dr. Owen: This is a probing new clause, but it goes to the root of this miserable Bill. There is no question, and the Government do not deny this now, but that in the first three and a half years of implementation there will be extra costs to the Royal Navy. The only question is whether, during the next six and a half years, there will be sufficient savings to compensate fully for the extra costs incurred in the first three and a half years. Nothing that has been presented to the House, to the Select Committee on Defence or to the Public Accounts Committee gives any confidence that this will do anything other than cost the Navy dear. It will certainly cost the Navy in money terms, but it will be an even greater cost in terms of the inability to turn round the capital ships of the Navy at the speed which the Navy requires.
We constantly forget that the task of the dockyards is to act effectively as a garage for the Royal Navy, to be available for instant use in cases of emergency and to have the capacity to ensure the full value of these capital ships.
I shall not refer to the lamentable delay in producing the information, but one advantage of the period that we managed to extract from the Government for analysis of the Bill is that we now have some figures for the costs and assets that we are discussing. The replacement value of the assets of Devonport dockyard has been estimated, taking 1985 as the base year, at £772,740,970. That is a vast sum of money. The existing use value of Devonport dockyard has been estimated at £227,727,830. The annual value is £23,911,090. We are dealing with a massive industrial

enterprise. The Government have not been prepared to privatise those assets because they know that no one could possibly find the money to buy them. So there is an agency arrangement.
We had great difficulty in pinning down the extra costs. I gather that there is an estimated £30 million in consultancy fees and so far unquantified costs in Ministry of Defence staff time. That money has been spent before the exercise has started. There is the £46 million to ensure the continuation of the supply service to the Ministry of Defence, and between £150 million and £200 million to set up pension funds for transferred service. In addition, VAT must be paid on dockyard contracts.
A licence fee will be payable quarterly in advance when assets are described in the schedules. It is proposed that the licence fee will be equal to the annual value to which I have already referred. It will need to be adjusted periodically during the term of the contract to take account of changes in the composition of the assets as a result of new investment or the removal of assets to take account of inflation, depreciation and other factors. There is a continuing cost in dealing with the estimation of the assets.
Under these arrangements, we are told that the contractor will be fully responsible for the maintenance and repair of the assets at his expense. In some circumstances, the Ministry will bear the cost of replacing the assets and the contractor will normally be invited to tender for the supply and/or the installation of replacement assets. In other circumstances, the cost of replacement will be borne by the contractor. All of these carry heavy estimating costs, continuing consultancy arrangements and, indeed, bureaucracy.
On bureaucracy, it appears that the Ministry's organisation to monitor and oversee the contracts will employ as many as 900 people. I should be grateful if the Minister of State would let us know the exact size of the monitoring organisation, which will be set up in Bath or perhaps spread through the dockyards. How much will it cost? It may cost tens of millions of pounds.
I am told by the Shipbuilding Trades Joint Council that an internal Ministry of Defence report has identified future requirements for 11 officers in nuclear and radiological safety, five officers in nuclear qualified secondment, an unquantified extra requirement for naval base commanders for personnel work at Devonport and Rosyth, 18 naval personnel for local emergency monitoring organisations and 25 officers on ships acceptance trials. The biggest extra investment is expected in the proposed enhancement of the Navy's fleet maintenance bases as a direct consequence of agency management. We do not have real estimates of those, although the first estimate for the Ministry of Defence is £3·5 million in capital expenditure and 80 extra naval personnel. This is at a time when there is some difficulty in manning the Navy fully.
The dockyards will be supplied by the Ministry of Defence with the management financial ledger, an accounting package for the use of the contractors; the cost of that is estimated at £95 million. The story will be unravelled month by month. There will be probing and investigation and we shall calculate the costs of this enterprise. My view is that the Minister of State's heart is not in it. Certainly we cannot blame him as he was not in at the start of the exercise. This hare-brained scheme was initiated by the right hon. Member for Henley (Mr.


Heseltine). There is no reason why the Minister of State or the Secretary of State should continue with this beyond the satisfaction of getting the legislation passed.
There will be increased costs in the commercial world. We are told that before entering into contracts for non-defence work that required deployment of significant resources or prolonged use of facilities, especially docks, or which are likely to result in consequential time or cost penalties to Ministry of Defence work, prior consultation with the DGSR — this new bureaucracy — will be required. So far from setting them free, they will have to look back over their shoulders to get permission from Bath.
We are told that on refits and repairs it should be clearly understood that this core programme is based on the current fleet requirements and that changes will be unavoidable as tasks and operational needs alter. The DGSR will review the core programme with the contractor on a quarterly basis and will also discuss changes as they arise at the earliest possible date. There is a constant Ministry of Defence involvement with this agency management at every stage, and at every stage there is duplication and cost.
We are also told in relation to operational defects and other unprogrammed works on Royal Navy vessels and auxiliaries that the contractor may, however, be required from time to time to carry out such work on a noncompetitive basis. The contractor will be required to comply with requests to undertake this work, which may be crucial to fleet availability. There will be contractual obligations over and above the core work imposed on the contractor, and the Ministry of Defence will demand that this work be done. What control will there be on the price? No one else is involved and there will be a monopoly.
HMS Illustrious is a perfect example. We are told that the work on that ship could be handled by the fleet maintenance base in the constituency of my hon. Friend the Member for Portsmouth, South (Mr. Hancock). But what happens if it cannot be done by that base? It comes into work unprogrammed to the fleet contractor. Big vessels, such as HMS Illustrious, can go only to Devonport. But the dockyard work programme is full, so the private agency management turns round to the dockyard and demands almost what it wants. There is no one else to go to.
We are also told about the company structure. We are told that this two-tier company structure is preferred by the Ministry for several reasons. The next bit is worth quoting. It says that one reason is that
it will enable the Ministry more easily to detach the dockyard workforce from the contractor when the term contract ends for whatever reason.
We are talking about people who have given a lifetime of service to the dockyards.
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We then try to find out what all this means. The document says:
In the event that the term contract is terminated for whatever reason the original contractor will be required on termination to transfer all his shares in the dockyard company either to the new contractor or to the Ministry. This will in effect transfer the employment of the dockyard workforce to the new contractor or the Ministry.
I assume that that means that when the contract is terminated the whole dockyard labour force is automatically transferred. But what would happen if the core programme for the new contract was substantially less than

was given for the first 10-year contract? Will the whole work force be taken on? As the Ministry knows, there is a real difficulty. Someone must be responsible for those men before the redundancy payments are made. Effectively, the Government are saying that the new contractor will take on the work force even though, as a result of the new core programme for a further seven-year contract, the first task may be to make the men redundant.
We then find that there are no safeguards covering the second contract period. I believe that the only contractual arrangement is that guarantees have been given as to how to deal with this situation in the case of the initial redundancy. But there is no safeguard for the redundancies that we fear will follow the second seven-year contractual period. Thus, there would be no safeguards for a second agency management, which would never even be expected to employ the men. I believe that I am right in saying that.

Mr. Gordon Brown: Does the right hon. Gentleman accept that the Ministry's provision for redundancy payments is just on the first letting of the contract and that there is no provision for redundancy payments made during the first seven years?

Dr. Owen: Yes, but it is even more worrying that for the second term, when the contract starts again—since it requires a new core programme to be negotiated—those responsible for redundancies would not even be the people who employed those men for the first seven years. Those responsible would come in suddenly and would have no relationship with the work force. In those circumstances, it does not require much imagination to realise what poor redundancy terms would be offered. The more one looks at the programme, the more one sees that a lot of feeling will be aroused, that the parallel organisation built up in Bath will expand and that the cost will also increase.
The 10-year programme will obviously envelop one period when the term contract is likely to be changed and so the costs will be far higher than has been outlined by the Minister. We shall discuss later how something can be rescued from this mess, but I shall not anticipate that now. In the meantime, will the Minister give us all the information at the very least that has already been given to the PAC, and will he try to answer some of the questions put to him about the growth in costs? Indeed, senior naval officers are now anxious, and are saying that if it had been made clear to them that this extraordinary miasma of interlocking committees overseeing parallel organisations had been envisaged, they would not have dreamt of embarking upon such a course.
The Minister owes it to himself completely to rethink the situation. The Bill will no doubt be forced through tonight with the votes of Conservative Members, but before the final moment when no changes can be made, perhaps he will reconsider this whole issue. The point is that the cost to the Royal Navy, the taxpayer and the country is unquantified but is already quite imaginable, and is far greater than the Government have acknowledged.

Mr. Douglas: I shall be brief. We know that certain evidence was given to the Defence Committee and to the PAC last year. To coin a phrase, we shall deal not with a snippet from Tippet but with the information given by Sir Clive Whitmore to the PAC. In response to question No. 257, Sir Clive said:
We have got to say that we have to make a lot of assumptions in doing these costings about a situation we have not faced before. We have had to make assumptions about the rate of profit that the contractor would want to see. We have had to make assumptions about redundancies which in the end might not actually be fulfilled if the contractor came in and decided after he had some experience of running the dockyard that he wanted to adopt an expansionist approach by seeking non-defence work to add to the defence work. The redundancies might turn out to be fewer than we assume. We have tried to approach the costings on a worst case or near worst case basis, but we do not think that in the event the savings could turn out to be larger than those that Vice-Admiral Tippet had been mentioning.
We know that the PAC has examined those so-called savings. However, in the interim, a Standing Committee has consistently probed the Government's estimates. The Government have not been very forthcoming about the nature of those savings. We have seen a change in attitude from the original proposals about a managing company and an employing company to the Government wishing to have a managing company and a dockyard company as the repository of the labour force.
There is no sign of any savings from the costing exercise. Indeed, there are no savings, but only costs and heartache. I could take up the time of the House by reading all of the Fuller Peiser report, but I shall not do so. Incidentally, I do not cast any aspersions on the chartered surveyors, as I recognise the difficulties. However, the Government propose to hand over plant and buildings. The report says:
Most buildings have been visited and some have been inspected in detail with reliance being placed upon the drawings of the PSA plan library for dimensions. This has enabled us to estimate valuations which we consider to be reliable on the whole but it will be necessary to check the details of the scheduling and allocation of values during the course of stage 2.
Plant &amp; Machinery
Whilst buildings have been briefly visited no plant has been inspected in any detail, reliance being placed on existing records obtained from the Finance Department and Yard Services Department and a list provided by the Cost Centre.
There is no way any responsible Government Minister can say to the House, "This scheme to change the ownership of the dockyards to a contractual relationship will produce savings." We assert that it will be costly. Why? First, because of disruptions. The Government have undermined the morale of the labour force at Rosyth and at Devonport. When the morale of a highly skilled labour force is undermined, productivity may tail off. That will be a cost. Currently management has to spend time holding the hands of contractors who are going through the yards, indicating what functions they might have to perform. That is a cost—not one which we will see immediately in the accounts but a cost in terms of satisfying the Navy.
Additional costs were mentioned by the right hon. Member for Plymouth, Devonport (Dr. Owen) such as the cost of redundancy, the cost of pensions and the cost of indicating to contractors what security functions they might have to perform. I have scanned the documents quickly and some of the details are frightening. At the beginning the Ministry of Defence police will have certain functions but in later years the so-called contractors may bring in security personnel. This is a tangential remark; in Committee I recall that the Under-Secretary could not

assure us that such security personnel would not be employed where there were nuclear facilities. I hope that he can assure the House and the country that his further reflections will lead him to insist that no private security personnel will be employed on nuclear functions in Devonport or Rosyth.
This is an exercise in dogma. It is significant, as I mentioned earlier, that neither of two right hon. Members whose names appear on the back of the Bill is present in the House. Where is the right hon. Member for Henley (Mr. Heseltine), who was the arch-promoter of the Bill? Neither of the two hon. Gentlemen who are on the Front Bench has his heart in the Bill. It is the product of the right hon. Member for Henley and of the person whom he brought into the Ministry of Defence, Mr. Peter Levene. There is no evidence that any savings will accrue to the Exchequer or to the Ministry of Defence from the promotion of the scheme.
Although I may be out of order on the new clause, I suggest that the Government should reconsider their objectives. If they have the interest of the Navy at heart, they will cease this costly exercise and stop asking people to examine the dockyard facilities. That will not increase the value of anything. They should stop the nonsense of bringing in contractors and holding them by the hand. They should retain a wholly owned public corporation. All the other things that they want to do can be done just as easily by retaining all the assets, including the labour force, within the public sector. To continue producing huge documents and inviting Touche Ross and other consultants to go through the dockyards is a costly waste of time and will be of no benefit to anyone in the Navy or in the dockyard. It is costly to the country as a whole.

Mr. Gordon Brown: The purpose of the new clause is to ensure that information not available to us before the implementation of the scheme will be available to the House after its implementation. I emphasise what my hon. Friend the Member for Dunfermline, West (Mr. Douglas) has just said. We are worried about the absence not only of the right hon. Member for Henley (Mr. Heseltine), who was not just the author of the scheme, but who made such extravagant claims for it, but of the Secretary of State for Defence, who is a newcomer to the privatisation of dockyards. We are concerned, too, about the absence of almost all Conservative Members with constituencies in the south-west, who have said to local trade unionists at Devonport that, while they could not be present in Committee, they were examining the scheme with interest.
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I should have thought that the Government would be anxious to accept the new clause, because it will allow them to prove to the House that there will be savings and to test the philosophy of value for money and open competition. The new clause is very much in line with the recommendation of the all-party Public Accounts Committee, which asked that there should be proper monitoring of the scheme. The new clause would get over the problem which the Public Accounts Committee foresaw early on, when it said that the evidence presented to it by the Ministry of Defence about savings was about the worst evidence that it had ever received.
I can understand the embarrassment of Ministers if they were to accept the amendment, because they would have to show to the House and to another place, year in, year


out, that an exercise whose sole purpose was to save money would end up costing money, not just in one year or two years, but for the rest of the decade, and almost certainly for the rest of the century. The evidence would show that the Ministry of Defence, the Admiralty Board, and the managing directors of Devonport and Rosyth dockyards had been duped by Mr. Peter Levene and by the right hon. Member for Henley into believing that it was possible, by this shabby scheme, to make savings. We tabled the new clause because effectively the Bill offers a blank cheque to two private contractors who will be in a monopoly position to dictate the terms of refits for vessels and submarines for the Royal Navy.
What we know already is alarming enough. The Ministry of Defence will have to ask the Treasury to set up a private pension fund, which will cost £150 million, or perhaps £200 million. The initial bill for redundancy payments will be about £40 million, and private consultants are to be paid £30 million, making a total of £70 million for transitional costs. Other costs associated with starting up the scheme will be involved in the creation of a new stores and supply organisation if the contractor decides that he wants to contract out, and we are reliably told that that could cost as much as £46 million. It has been conceded by the Minister's working party that the expansion of the fleet maintenance base will cost several million pounds.
The Minister of State has a duty to tell the House today what he will cancel to pay all the start-up costs, which I estimate to be about £300 million even in the first year of the scheme. Will he cancel the type 23s? Will he not proceed with the auxiliary oil replenishment vessels, for which there is such fierce competition between two shipyards? Are savings to come only from the Navy, or from the Navy, the Army and the Air Force? He should tell us how his Department proposes to pay an initial bill which could run beyond £300 million in the first year after the implementation of the scheme.
Those are only the known costs associated with the start-up of the privatisation project. The Minister ought to tell us his estimate for the profits of a private operator. My assumption is that on a turnover of £415 million for the dockyards they would not be less than 10 per cent., making an additional cost of £40 million, which must be recouped.
The Minister ought to tell us what exactly the cost of the new monitoring organisation which he is proposing to set up will be. Our estimate is that it will take about £11 million a year to pay for the additional hundreds of staff who will be involved only in supervisory operations. The Minister ought to tell us what the additional costs associated with value added tax will be, and the costs of setting up an additional and new form of accountancy organisation to which his Ministry is committed. We ought to be told what the known costs that the Ministry of Defence has to recoup by savings in other areas will be for each year that the scheme is in operation. Again, these are only the known costs associated with the year-to-year operation of the dockyards under private control.
There are also the unknown costs and the uncalculable costs because, no matter what it says in the tender documents, the Ministry of Defence, in its advice to contractors, is effectively enabling two companies to dictate the price at which they will do work.
The problem of emergency work during the period of refits has not been properly addressed by the Ministry of

Defence in its proposals for this scheme. The problem of unprogrammed work, when the contractor will have to change his basic timetable to accommodate the Ministry of Defence, has not been dealt with either. The problem of emergency work is dealt with in only one paragraph of one of the working party reports, where the Ministry readily concedes that it will have to reimburse the contractor for taking on emergency work demanded by the fleet which would interfere with the private contractor's programme. This is unique. The Ministry of Defence will pay extra money to use a facility that it owns.
I do not understand why the Ministry of Defence has not been prepared to accept the advice of the Treasury, which in its privatisation guidelines make it clear that
When work is transferred to the private sector it is important to consider the problems that might arise if a department becomes tied to a monopoly supplier
We know that the record of the private sector in naval refits is inferior to that of the public sector. The Minister cannot produce any evidence, either from the experience of the 1960s and 1970s or from recent refits such as HMS Redpole, that the private sector is better for quality, efficiency, delivery time or cost. All previous reports on dockyard work, whether the Speed report, the Hudson report or the Mallabar report, have concluded that the public sector is more dependable, more efficient and cheaper.
The Ministry of Defence admits that transitional costs will be very high, that the year-to-year costs to the defence budget will be greater than if the dockyards were run under the present public sector arrangements, and that there is a price to be paid for demanding emergency unprogrammed work under private control. Having heard all the evidence that the public sector is better for time, efficiency, delivery and cost, the Ministry is prepared to hand the dockyards over to private contractors.
The purpose of the Levene document, which initiated this sorry tale of events about the dockyards, was to save money. When the Gracious Speech announced that the dockyards were to be moved to commercial management, the stated objective was to secure value for money. When the right hon. Member for Henley defended his programme before the House, he said that he would secure that value for money. The evidence is now overwhelming and clear that there is not a hope of the Ministry of Defence saving money. Indeed, it will have to spend money. Far from diminishing the costs of naval support, the scheme will increase them.
The Minister should accept the new clause, tell us that there will be further consultation on the scheme, and withdraw the Bill.

Mr. Michael Hancock: The hon. Member for Dunfermline, East (Mr. Brown) has got to the crux of the matter. The absence of Conservative Members is a clear sign of widespread support for new clause 1 No doubt the Minister is hoping that their absence will mean that he has an easier task convincing his one hon. Friend who is present that the Bill should be accepted.
New clause 1 asks the questions that the Minister promised to answer time and again in Committee to justify the Bill and what gains there will be for the national purse, the Royal Navy and for the people who work in the dockyards. There has been no attempt to answer those questions. As my right hen. Friend the Member for Plymouth, Devonport (Dr. Owen) said, £750 million is


invested in the Devonport dockyard alone. These are huge sums of money, so we should know what benefits will accrue from the transfer of responsibilities.
The Ministry's notes on clauses beg more questions. Many of us have been denied access to documents that might have provided the answers. The notes state the Ministry's objectives. The first is full value for money from the defence budget. How will such value be achieved? Where will savings be made? The second objective is maximum competition. The third is freedom for local management from public sector constraints, enabling them to operate effectively in a competitive environment. The fourth is improved efficiency. If efficiency is improved, there must be savings. Why are Ministers reluctant to elaborate on what efficiency and savings will mean? The fifth objective is a clear separation between the dockyard as the supplier and the Royal Navy as the customer.
HMS Illustrious returned to Portsmouth recently because of gearbox trouble. Both of the other Invincible class carriers were tied alongside the fleet maintenance depot in Portsmouth. What would have happened, as might happen in two years' time, if the fleet maintenance operation had been dealing with one of the other carriers? There would have been protracted negotiations between the Navy, the organisation in Bath and the contractor about shifting the ship from Portsmouth to Devonport and about the cost of the job. It is unfortunate and dangerous that we are putting the future role of the Navy at risk because we are allowing a contractor to name his price. The Government should ensure that there is no doubt about the financial justification for this Bill. The Minister surely cannot fail to answer the question that this new clause asks. Failure to do so must convince everybody, including the Minister's colleagues, that the Bill has no future, and must go into the wastepaper bin.

7 pm

Mr. Bruce George: When I look at the Government Benches, I am reminded of an Adjournment debate. It is a profoundly disillusioning experience for many hon. Members. I suppose that there are people who still naively assume that the Conservative party is the party of defence. That cannot be justified by the attendance of Conservative Members in the Chamber or by the Government's decisions. We know that Conservative Members are in the building because they all poured into the Chamber an hour and a half ago. However, it is clear that they have no stomach for what is being decided in their name. Apart from it being profoundly disillusioning, it is also unusual to find, perhaps for the first time, that those on the Opposition Benches this evening greatly outnumber those on the Government Benches; and those who are sitting in the Civil Service box outnumber both Opposition and Government supporters. It has been worth coming into the Chamber for just that experience.
My right hon. Friend the Member for Llanelli (Mr. Davies) said that the Government team is acting at the behest of the Treasury. That is wrong. It is acting at the behest of Tory Central Office and of those who drafted the last Conservative manifesto which eulogised privatisation. That was to be the solution and the cure for many of the ills in our economy. When that principle was applied to

the Ministry of Defence, it was obliged to implement lunacies that had been decided upon years ago in the smoke filled rooms of Tory Central Office, or wherever the manifesto was drafted.
The result of the Government's policies provides an inane solution. It will exacerbate this country's already considerable defence problems. The Government are hopelessly over-committed. The resources available to them to meet their growing commitments are inadequate. As the Government are unable, for one reason or another—public opinion is one factor—to increase defence expenditure in order to meet their growing commitments, they have thrown the principles of the market place at these complex problems. However, when one looks rationally at how efficiency is to be gained and at how our fighting forces are adequately to be equipped and led, one winces at what one sees. By their dogmatic solutions the Government are trying to save money. However, the contracting out that has taken place has been something of an illusion. Those who have suffered most have been cleaners or those who are engaged in security. The Government have not gained, therefore, from contracting out.
The Government have also tried to reorganise the Ministry of Defence because they believe that that is a means by which efficiency can be achieved. However, the amount that has been saved by greater efficiency in the Ministry of Defence is marginal. The Government have tried the privatisation solution. I served on the Standing Committee that dealt with the privatisation of the royal ordnance factories. I do not think that the public has gained very much from that process. Political dogma and the desire for efficiency have resulted in the Bill that we have been considering for the past few months.
If the Government believe that the public will gain from the privatisation of the dockyards, they are making a great mistake. It has already been pointed out that when the ledger is finally drawn the public will be the net losers—and very heavy losers. The gainers will be those who are lucky enough to pick up the contracts. Further losers will be our armed forces. The Ministry of Defence will have to bear the additional cost of consultancy fees. This is a growth industry. Hundreds of consultancies and so-called public relations experts will be involved. There will also be the cost of setting up pension funds for the staff who have to be transferred. I agree that that has to be done, but it will be costly.
In accordance with Mr. Speaker's wisdom, I am sure that the Ministers are disappointed that they will be unable to listen to and comment upon points relating to security. Instead of just the Ministry of Defence police, there are to be two security systems in the dockyards. There will be the Ministry of Defence police—although Ministers might have liked to get rid of them, they were unable to do so, for all sorts of reasons—and alongside them there will be the gradual extension of private security. That, too, will have to be paid for. When one looks at the additional staff who will have to be employed by the Ministry of Defence, the cost of redundancies and the value added tax that will have to be paid, one begins to construct a ledger and to realise that the public will be the losers.
The clause is important because it points out to the House and to the public, if it needs to be pointed out, that


this privatisation lark will be yet another disaster. The clause therefore seeks to establish a modicum of parliamentary accountability and scrutiny.
Before the debate began, I was in the Library. I was not looking through the documents to which reference has been made. They were being bandied about in the Chamber, probably to greater effect. I was looking at the legislative role of Congress. Congress is very much involved in the legislative process. Hon. Members discuss each year one or two defence Bills. This Bill was introduced in such a way as to make constructive criticism and constructive comment exceedingly difficult.
If one believes in efficiency, the Government ought to consider that they have been provided with a great opportunity to justify how clever they have been by being obliged to place before the House the savings that they intend to make. The new clause ought to be regarded by the Government and their supporters as providing an opportunity to justify those savings. However, none of the Government Back Benchers who served on the Standing Committee is in the Chamber. It has brought a new dimension to the term "Trappist". At least they were physically present in Committee, but they are not physically present, or even possibly spiritually or intellectually present, for these proceedings. Government Back Benchers fulfilled their obligations to the Whips and then cleared off. It is a pity that they are not here at least to justify to their constituents why they wasted space being on that Committee. At least two members of our Committee had the excuse of being simultaneously engaged in the inquiry into Westland.
This clause is an attempt to establish some form of accountability. In view of the proceedings in Committee and the charade that we are going through at the moment, being denied the information essential to us as legislators in achieving our objective of scrutinising Government policy and legislation, it is clear that the Government are seeking to bypass Parliament, or to use merely the shell of Parliament, in order to go through the process with as little inconvenience as possible to themselves.
If the vast numbers of Conservatives who are at present in their offices rush out when the call comes and, with superb efficiency, vote down new clause 1, the Government will lose an opportunity, even within their own warped ideological perspective, to show the House and the world how effective they have been in making savings for the public Exchequer.
I believe that this clause deserves, but will not get, proper attention from the Government and Government Back Benchers. It seeks to achieve a small degree of parliamentary accountability, which I believe that this Government will seek to deny. I believe that the reason that it will not be approved is that the Government realise, if they look very carefully at what they have decided and what they have put into this legislation, that the savings will prove an illusion. The people who gain from this process will be, not the services or the British taxpayer, but the dogmatists and those who may be able to pick up the contract and profit financially.
My name is appended to the list of those who tabled new clause 1, and I very much hope that those people who are not listening to this debate will have some pangs of conscience and will support it. If the clause is approved, the many hours that we spent in Committee and the hours that we are spending here may not prove to be such a waste of time.

Mr. Norman Lamont: A large number of points have been raised in this debate and I shall do my best to reply to them and to give the House some of the information that it has been seeking. First, however, I wish to direct my remarks to what new clause 1 does, because I do not believe that it is sensible.
The new clause would have my right hon. Friend the Secretary of State set out all the costs and savings of £100 or more resulting from the decision that the dockyards services should be provided by a company under commercial management. The new clause does not say when such a report is to be made. Clearly, since it talks of savings resulting from arrangements made, it does not mean that such a report is to be made before the Government's policy is implemented. It does not say whether the report should be made after the scheme has been in operation for a month, a year, five years or the full term of the original contract, which is seven years. The House should also consider what, even were the clause worded properly, it would achieve in terms of legislation. It does not say what should happen if the savings are large, small or non-existent. For those reasons, I do not think that the clause would achieve anything.
I appreciate that one of the reasons for tabling the new clause was to raise questions about the costs and the savings, and I should like now to try to reply to some of the points that have been raised.
It is open knowledge that our latest costings, which were made in February of this year, showed an annual surplus to the Exchequer of £21 million over each of the first 10 years of commercial management, during which time the setting-up costs would be amortised, and thereafter savings were estimated at some £28 million a year. On our latest estimates, therefore, there should be savings of £210 million in the first 10 years, and greater savings thereafter.
Hon. Gentlemen have referred to the amortisation of costs over the 10-year period and have criticised what they see as the heavy setting-up costs involved. One point that is ignored by hon. Gentlemen when they make these criticisms is that whatever system is evolved to try to improve the performance of the dockyards—hon. Gentlemen have been urging upon us another solution, that of having a trading fund, some other middle way, as they see it—many of these initial setting-up costs will have to be incurred.
It seemed to be common ground in Committee that we need to tackle the problem of inefficiency in the dockyards. Report after report has said that performance is not all that it might be, and that such things as the setting up of accountancy systems, which involve software programmes and the purchase of hardware, are necessary for the modernisation of the dockyards and the setting up of a proper commercial framework. That would have to happen whichever solution we adopted for the dockyards.

Mr. O'Neill: Given that the Government undertook a wide-ranging survey of the various options beforehand, perhaps the Minister of State could tell us how much the start-up costs of a PLC would have been, so that we have some realistic basis of comparison. As far as we can see, none of the alternatives would have cost the £70 million or so which has been mentioned by various hon. Members.

Mr. Lamont: I shall go further into the question of the £70 million, and I hope that when I do that it will become


apparent that many of the measures to improve efficiency would be necessary whichever vehicle was chosen, and many of them are the manifestations of increased efficiency.

Mr. Denzil Davies: rose—

Mr. Lamont: I shall give way to the right hon. Gentleman, but then I want to take my argument further, because it meets exactly the point raised by the hon. Member for Clackmannan (Mr. O'Neill).

Mr. Davies: The Minister said that the annual surplus to the Exchequer over the 10-year period would be £21 million. Can he tell us what the annual deficit to the Ministry of Defence would be in each of those 10 years?

Mr. Lamont: I am coming on to the impact on defence as well.

Mr. Gordon Brown: rose—

Mr. Lamont: No, I shall proceed just a hit further.
As the new clause refers to a report to Parliament, the House might like to know that it is our intention that the customer organisation—or, to give it its proper title, the Directorate General of Ship Refitting—will produce an annual report of the previous year's dealings with the dockyard company at each yard and with others involved in the refitting and repair of naval vessels. As, unlike now, there will have been a separation of the Navy as customers from dockyard to supplier, and there will be in existence commercially accepted accounting procedures, the annual report which the DGSR presents will have to be full and informative. Additionally, the books of the two dockyard companies will be open to my Department to the same extent as are any other defence contractors' books when we have negotiated a non-competitive contract with them.
The right hon. Member for Llanelli (Mr. Davies) outlined the structure of the savings and costs. While in no way retreating from the figures that have been given earlier to the House and to the Public Accounts Committee, I should like to say that the figures are based on worst case assumptions and are not a prediction of what will happen. There are many variables; for example, the savings that can be achieved and the efficiency gains that may be exceeded. The figures are not a prediction, but we have had to answer questions and make certain assumptions.
The right hon. Gentleman asked what changes had been made since the previous estimates. They include alterations to the amount of profit that has been assumed. The profit that is now being assumed is calculated according to the Ministry of Defence profit formula, but there is not one profit formula. Different profit formulae are applicable to different industries; for example, according to their capital intensity. Another example is the setting-up costs and the implementation of commercial accounting systems, which include software and hardware. All those fall within the £70 million initial costs that we have been assuming.
The right hon. Member for Llanelli outlined the structure of costs and savings as he saw it, and basically got the equation right. However, I cannot fill in all the figures under those headings, because it would not be right to do so. We would certainly not wish potential contractors to know certain of them, but I shall reply to some. The

right hon. Gentleman is right in saying that the initial costs include the changes in working practices, the preparatory work that is being done, and worst case assumptions about redundancies, which may not happen. Annual costs cover the customer organisation, contractors' profits and amortisation. We estimate the initial costs at £70 million. The figures that we have been analysing are nowhere near the figures mentioned by the hon. Member for Dunfermline, East (Mr. Brown), who talked about £350 million. I noticed that he was at least modest in that he did not go as far as some trade unions have done in mentioning a figure in excess of £400 million.

Mr. Gordon Brown: If the Minister accepts the structure set out by my right hon. Friend the Member for Llanelli (Mr. Davies), obviously he is conceding that the scheme will cost the Ministry more. Will he answer the specific point about the initial start-up cost? If we include the cost, readily admitted in the Bill, of £200 million to set up the private pension scheme, the transitional costs of £70 million, the extension to the fleet maintenance base, the setting up of a new supply organisation, and the possibility of having to establish a new accountancy organisation, we see that the costs in the first year will be more than £300 million.

Mr. Lamont: The costs will be nothing like that.

Mr. Brown: Tell us why not.

Mr. Lamont: If the hon. Gentleman will allow me to answer the questions, he will possibly see the substance of my position, even if he does not agree with it. He is wrong about pensions. The cost is merely the shifting of a liability which the Government would have incurred in any case. It is not additional public expenditure, because those liabilities already exist. Future pension contributions will be an addition to the public purse, and I shall come to that.
The right hon. Member for Plymouth, Devonport (Dr. Owen) asked about the new DGSR organisation. We are now assuming on a worst case basis that as many as 800 people could be involved. Hon. Members asked why that may be necessary. I hope that it will not be necessary. However, new tasks are being done which were not undertaken under the old organisation. There were no contracts before for ship refitting. There is the production of specifications in support of project contracts, the negotiation, placing and monitoring of contracts, and overseeing in the dockyards. Part will be placed in Bath, and part in the dockyards.

Mr. Douglas: Will the Minister confirm this mind-boggling statement, which appeared in the letter from C. M. Edwards, the director of contracts ship refitting:
The Ministry of Defence has established DGSR as a new organisation to act for the customer and exercise day to day project management responsibility for the Term Contract and for individual project contracts.
Is it realistic to assume that the DGSR based in Bath or elsewhere will exercise day-to-day project management? The Minister shakes his head, but that is what the letter says. Do we already have a misleading document?

Mr. Lamont: The hon. Gentleman knows perfectly well that the customer organisation will not be managing projects as projects are at present managed in the dockyards. I hope that the customer organisation will not involve the sorts of numbers or costs that Opposition


Members have been talking about. We have been open about that, and have been making our arguments about savings on the worst case possibilities.
The hon. Member for Portsmouth, South (Mr. Hancock) and the right hon. Member for Llanelli said that we do not know what the efficiency savings will be, and challenged me to disclose them to the House. The right hon. Gentleman is far too clever for that. He knows perfectly well that I cannot tell the House what efficiency savings we are assuming because we do not want to inform contractors of that at this stage when we are just going out to tender. We do not want to tell them our assumptions for productivity increases and cost reductions. It would make no sense for us to display that to the world at the precise moment when we are asking companies to place competitive tenders and when we want to choose the best one in terms of productivity and efficiency. We have an assumption which is built into the figures and is behind the £21 million and £28 million savings after the overheads have been recovered.
The right hon. Gentlemen the Members for Llanelli and for Devonport made great play of the impact on the Defence Vote. The Ministry of Defence will incur certain costs which are not at present incurred. Obviously, the contributions to pensions will in future be paid for by the Ministry of Defence as an overhead, as is the case with all customers of companies. Customers often pay a company's overheads in the prices charged. No other part of the Government can pay. The Treasury cannot pay the pensions of a private sector company through the prices. Obviously, the Ministry of Defence must do that, and that has an effect on the Defence Vote. The real point is not the effect it will have on the Defence Vote, but rather the effect it will have on the defence programme, and this extra cost will be taken into account in the public expenditure survey and when we decide what the programme will be for the defence budget.
7.30 pm
The hon. Member for Dunfermline, East (Mr. Brown), in another instance of his wild ideas about extra costs, spoke about the extra costs on a supply organisation, and he trotted out a figure of £46 million, saying that he had that sum on very good authority. I think that the hon. Gentleman was thinking of working group one, which was considering a possible need for proportionately higher stockholdings if the contractors decided to supply their own spares, and the possible value of the spares was assessed in the contract as being £46 million. However, that does not mean that an additional purchase must be involved, but simply that there would be a smaller reduction in the overall spare holdings so that operational support remained at an acceptable level. There again, just as elsewhere, the hon. Gentleman has been content to make wild allegations and exaggerations not based on fact. That was made clear to the hon. Gentleman in, I think, the Committee stage.

Mr. Gordon Brown: What is the point of duplicating these supply organisations?

Mr. Lamont: I explained to the hon. Gentleman on many occasions during the Committee stage that sometimes a contractor might wish and think it more efficient to have his own spares organisation and to provide them. However, the extra cost involved would be very small. At some time it could be that there would not

be the access to that spares supply that there is at the moment from the naval base to the dockyard. That is the simple administrative point, but it does not involve a huge extra cost.
Hon. Members also asked various questions about consultants. I think that again a sum of £40 million was alleged by one hon. Member. Most of the money that has been spent on consultants has been spent on the setting up of commercial accounting systems. As I have said, that involves the purchase of hardware and software. The setting up of such systems has amounted to about £15 million, and the other support for consultants has amounted to £5 million, but that is all included within the £70 million initial costs. That cost, when it has been amortised, will result in savings to the Exchequer of £28 million, and of £21 million a year even before that.

Mr. Denzil Davies: The hon. Gentleman has said again that there will be an annual surplus to the Exchequer of £21 million a year over a period of 10 years. What will be the annual deficit to the Ministry of Defence budget over that 10 years? Will it not be about £20 million or £21 million every year over 10 years?

Mr. Lamont: I dealt with the point about the de fence Vote. I said that there might be adjustments and that obviously certain factors had an impact on the defence Vote. I explained what those factors were, but I said that this matter would be taken into account by my right hon. Friend the Chief Secretary when we determine what the Vote on the defence budget will be. The relevant point is that there will be savings to the Exchequer.
It is also relevant that everyone has agreed that there is a problem in the naval dockyards because of inefficiencies. Report after report has said that. Right hon. and hon. Gentlemen are not facing up to that fact, however much they complain about the costs of the changes that we are implementing. They have said that there are other ways of making the dockyards more efficient, but they should recognise that the costs to which I am now referring in answering questions would be incurred in any alternative solution as well. The only difference is that an alternative system would not work. We are the first Government who have faced the problem. To implement these efficiency measures is not a matter of dogma: it is simply common sense. It is of interest not just to taxpayers but to the armed forces and the Navy in getting a good service out of the naval dockyards. For that reason, I urge my right hon. and hon. Friends to reject the new clause.

Mr. O'Neill: Anyone who had not been on the Committee on the Bill and who was in doubt about why earlier we sought time to examine the information made available to us at such a late stage this afternoon will now understand our reasons, having heard the inadequacy of the Minister's reply. He commenced by talking about the amendment in the time-honoured way, saying that there could be shortcomings, that technical matters were involved, that the timing was not right, that the phraseology was incorrect, and so on. The Minister agrees to one of the later amendments. In that case he seeks to improve it himself by changing it. Therefore, if the Minister has difficulty with amendments, the remedy lies in his own hands.
The inadequacy of the Government's response this evening makes clear, first, that they do not really know how much the savings will be. As a last flourish, in what


one imagined was the peroration of the Minister's speech, he referred to the inadequacy of any alternative solution to the problem, but he could not even tell us how much the commencement costs of a plc would be as against the option selected by the Government.
It has been broadly accepted by the Opposition (and the Minister has not chosen to refute this) that, starting last year, with a saving of £26 million, the figure had been whittled down by this February to £21 million, a figure which, on a turnover of about £400 million, barely makes the whole exercise worth the candle. As my hon. Friend the Member for Dunfermline, East (Mr. Brown) said, it is barely worth the candle when we consider the bitterness caused, the deterioration in industrial relations, and the problems created for management in these yards.
So far, no attempt has been made to calculate how long it has taken for management and staff of the yards to explain to consultants what the changes will involve, nor has the time been calculated that it has taken for the contractors to have introduced to them the workings of the yards. What will be the likely costs in the months and years ahead when the members of middle management who are still there will be working out the essential work to be carried out in the yards? Those people will have to hold the hands of the contractors while they begin to find their way around this complex industrial organisation.
This evening we have heard that there is a possibility that the customer and supplier organisations will be based at perhaps Bath, Devonport or Rosyth. According to my hon. Friend the Member for Dunfermline, East, who has had an opportunity to read some of the material on this matter, some of the customer organisations will in fact be responsible for day to day operations. The Minister says that that is not so because such operations are far too detailed. One can imagine that that is why such an operation would be in Rosyth, Plymouth or Devonport in the first place. People could be in Bath and jump on the train to get quickly to other places if they had to go there as consultants. Frankly, we know that this is merely evidence of the lack of thought by the Minister and his colleagues.
We know that there has been no lack of effort on behalf of the 19 working groups, which have produced report after report. The problem is that these reports have not yet been properly quantified. The suggestion has been made that once a year, following contractorisation, this customer organisation will produce an annual report of such detail that we shall be able to see clearly the extent of the savings. In this connection, the quality of the responses from the Government would suggest that there is no likelihood that the annual report from the director general of ship refitting will allay our fears or clearly indicate to us what will be the costs and savings of the new organisation.
The Opposition have cited different costings. We need not just a report by the DGSR but a report on which the Comptroller and Auditor General can comment. The Public Accounts Committee said that it was not satisfied that there had been a close enough examination of the massive assets to which the right hon. Member for Plymouth, Devonport (Dr. Owen) referred during his brief sojourn in the Chamber, which represent decades of investment by the Exchequer and the Ministry of Defence. A tuppence ha'penny report by the DGSR, perhaps from

its headquarters in Bath with a couple of paragraphs produced in Rosyth and another couple in Plymouth, is not sufficient. These figures are not adequate.
The new clause specifically says that any savings of more than £100 must be brought to the attention of the House in an annual report. The Government's assurances are inadequate. I therefore ask hon. Members to join with us in support of the new clause. If the measure does nothing else for industrial relations in the dockyards and for the quality of the workmanship provided by the contractorised yard, it certainly will provide a modicum of protection for the taxpayers' massive investments. I hope that, in the long run, it will give the Navy the service enjoyed for centuries through our dockyards. That service has been jeopardised by the Government's cavalier approach.

Question put, That the clause be read a Second time:—

The House divided: Ayes 170, Noes 224.

Division No. 120]
[7.42pm


AYES


Alton, David
Evans, John (St. Helens N)


Archer, Rt Hon Peter
Ewing, Harry


Ashdown, Paddy
Fatchett, Derek


Ashley, Rt Hon Jack
Faulds, Andrew


Atkinson, N. (Tottenham)
Field, Frank (Birkenhead)


Bagier, Gordon A. T.
Fields, T. (L'pool Broad Gn)


Banks, Tony (Newham NW)
Flannery, Martin


Barnett, Guy
Foot, Rt Hon Michael


Beckett, Mrs Margaret
Forrester, John


Beith, A. J.
Foulkes, George


Bell, Stuart
Fraser, J. (Norwood)


Benn, Rt Hon Tony
Freeson, Rt Hon Reginald


Bennett, A. (Dent'n &amp; Red'sh)
George, Bruce


Bermingham, Gerald
Gilbert, Rt Hon Dr John


Blair, Anthony
Godman, Dr Norman


Boothroyd, Miss Betty
Golding, John


Boyes, Roland
Gould, Bryan


Bray, Dr Jeremy
Gourlay, Harry


Brown, Gordon (D'f'mline E)
Hamilton, James (M'well N)


Brown, Hugh D. (Provan)
Hamilton, W. W. (Fife Central)


Brown, N. (N'c'tle-u-Tyne E)
Hancock, Michael


Brown, Ron (E'burgh, Leith)
Harman, Ms Harriet


Bruce, Malcolm
Hart, Rt Hon Dame Judith


Buchan, Norman
Haynes, Frank


Caborn, Richard
Healey, Rt Hon Denis


Callaghan, Jim (Heyw'd &amp; M)
Hogg, N. (C'nauld &amp; Kilsyth)


Campbell, Ian
Home Robertson, John


Campbell-Savours, Dale
Howell, Rt Hon D. (S'heath)


Carlile, Alexander (Montg'y)
Hoyle, Douglas


Cartwright, John
Hughes, Robert (Aberdeen N)


Clark, Dr David (S Shields)
Hughes, Roy (Newport East)


Clarke, Thomas
Hughes, Sean (Knowsley S)


Clay, Robert
John, Brynmor


Clelland, David Gordon
Kaufman, Rt Hon Gerald


Clwyd, Mrs Ann
Kennedy, Charles


Cocks, Rt Hon M. (Bristol S)
Kilroy-Silk, Robert


Cohen, Harry
Kirkwood, Archy


Cook, Frank (Stockton North)
Lambie, David


Corbett, Robin
Lamond, James


Corbyn, Jeremy
Leighton, Ronald


Craigen, J. M.
Lewis, Terence (Worsley)


Crowther, Stan
Litherland, Robert


Cunliffe, Lawrence
Livsey, Richard


Dalyell, Tam
Lloyd, Tony (Stretford)


Davies, Rt Hon Denzil (L'lli)
McCartney, Hugh


Davies, Ronald (Caerphilly)
McKay, Allen (Penistone)


Davis, Terry (B'ham, H'ge H'l)
McKelvey, William


Deakins, Eric
McNamara, Kevin


Dewar, Donald
McTaggart, Robert


Dixon, Donald
Madden, Max


Douglas, Dick
Marek, Dr John


Duffy, A. E. P.
Marshall, David (Shettleston)


Eadie, Alex
Martin, Michael


Eastham, Ken
Mason, Rt Hon Roy


Edwards, Bob (Wh'mpt'n SE)
Maxton, John






Maynard, Miss Joan
Sedgemore, Brian


Meacher, Michael
Sheerman, Barry


Meadowcroft, Michael
Sheldon, Rt Hon R.


Michie, William
Shore, Rt Hon Peter


Mikardo, Ian
Short, Ms Clare (Ladywood)


Millan, Rt Hon Bruce
Short, Mrs R.(W'hampt'n NE)


Miller, Dr M. S. (E Kilbride)
Silkin, Rt Hon J.


Mitchell, Austin (G't Grimsby)
Skinner, Dennis


Morris, Rt Hon A. (W'shawe)
Smith, Rt Hon J. (M'ds E)


Morris, Rt Hon J. (Aberavon)
Snape, Peter


Nellist, David
Soley, Clive


O'Neill, Martin
Stott, Roger


Orme, Rt Hon Stanley
Strang, Gavin


Park, George
Thomas, Dafydd (Merioneth)


Parry, Robert
Thomas, Dr R. (Carmarthen)


Patchett, Terry
Thompson, J. (Wansbeck)


Pavitt, Laurie
Thorne, Stan (Preston)


Pike, Peter
Tinn, James


Powell, Raymond (Ogmore)
Torney, Tom


Prescott, John
Wallace, James


Radice, Giles
Wardell, Gareth (Gower)


Randall, Stuart
Wareing, Robert


Redmond, Martin
Weetch, Ken


Rees, Rt Hon M. (Leeds S)
White, James


Richardson, Ms Jo
Wigley, Dafydd


Roberts, Allan (Bootle)
Wilson, Gordon


Robertson, George
Winnick, David


Robinson, G. (Coventry NW)
Young, David (Bolton SE)


Rogers, Allan



Rooker, J. W.
Tellers for the Ayes:


Ross, Ernest (Dundee W)
Mr. Allen Adams and


Ross, Stephen (Isle of Wight)
Mr. John McWilliam.




NOES


Alison, Rt Hon Michael
Goodlad, Alastair


Ancram, Michael
Gorst, John


Ashby, David
Gow, Ian


Atkins, Robert (South Ribble)
Gower, Sir Raymond


Baker, Nicholas (Dorset N)
Grant, Sir Anthony


Beaumont-Dark, Anthony
Greenway, Harry


Biggs-Davison, Sir John
Gregory, Conal


Body, Sir Richard
Griffiths, Sir Eldon


Boscawen, Hon Robert
Griffiths, Peter (Portsm'th N)


Bowden, Gerald (Dulwich)
Grist, Ian


Brandon-Bravo, Martin
Ground, Patrick


Brinton, Tim
Hamilton, Neil (Tatton)


Brooke, Hon Peter
Hanley, Jeremy


Buchanan-Smith, Rt Hon A.
Hannam, John


Buck, Sir Antony
Hargreaves, Kenneth


Burt, Alistair
Harris, David


Carlisle, John (Luton N)
Harvey, Robert


Chapman, Sydney
Haselhurst, Alan


Chope, Christopher
Hawkins, C. (High Peak)


Clark, Sir W. (Croydon S)
Hawksley, Warren


Cockeram, Eric
Hayes, J.


Colvin, Michael
Hayhoe, Rt Hon Barney


Coombs, Simon
Heathcoat-Amory, David


Cope, John
Heddle, John


Couchman, James
Henderson, Barry


Cranborne, Viscount
Hickmet, Richard


Currie, Mrs Edwina
Hill, James


Dorrell, Stephen
Hind, Kenneth


Douglas-Hamilton, Lord J.
Hirst, Michael


Durant, Tony
Hogg, Hon Douglas (Gr'th'm)


Eyre, Sir Reginald
Holland, Sir Philip (Gedling)


Fairbairn, Nicholas
Holt, Richard


Favell, Anthony
Hordern, Sir Peter


Fenner, Mrs Peggy
Howarth, Alan (Stratf'd-on-A)


Fletcher, Alexander
Howell, Ralph (Norfolk, N)


Fookes, Miss Janet
Hubbard-Miles, Peter


Forth, Eric
Jackson, Robert


Fox, Marcus
Jessel, Toby


Franks, Cecil
Jones, Gwilym (Cardiff N)


Fraser, Peter (Angus East)
Jones, Robert (Herts W)


Freeman, Roger
Jopling, Rt Hon Michael


Fry, Peter
Joseph, Rt Hon Sir Keith


Galley, Roy
Kellett-Bowman, Mrs Elaine


Gardiner, George (Reigate)
Key, Robert


Gardner, Sir Edward (Fylde)
King, Roger (B'ham N'field)


Garel-Jones, Tristan
Knight, Greg (Derby N)





Knight, Dame Jill (Edgbaston)
Roberts, Wyn (Conwy)


Knowles, Michael
Roe, Mrs Marion


Lamont, Norman
Rossi, Sir Hugh


Lang, Ian
Rowe, Andrew


Latham, Michael
Rumbold, Mrs Angela


Lee, John (Pendle)
Ryder, Richard


Leigh, Edward (Gainsbor'gh)
Sackville, Hon Thomas


Lennox-Boyd, Hon Mark
St. John-Stevas, Rt Hon N.


Lester, Jim
Shaw, Giles (Pudsey)


Lewis, Sir Kenneth (Stamf'd)
Shaw, Sir Michael (Scarb')


Lilley, Peter
Shelton, William (Streatham)


Lloyd, Peter (Fareham)
Shepherd, Colin (Hereford)


Lord, Michael
Shepherd, Richard (Aldridge)


Luce, Rt Hon Richard
Shersby, Michael


McCrindle, Robert
Silvester, Fred


McCurley, Mrs Anna
Sims, Roger


MacKay, Andrew (Berkshire)
Skeet, Sir Trevor


MacKay, John (Argyll &amp; Bute)
Soames, Hon Nicholas


McNair-Wilson, M. (N'bury)
Spencer, Derek


McNair-Wilson, P. (New F'st)
Spicer, Jim (Dorset W)


Madel, David
Spicer, Michael (S Worcs)


Major, John
Stanbrook, Ivor


Malins, Humfrey
Stanley, Rt Hon John


Malone, Gerald
Steen, Anthony


Maples, John
Stern, Michael


Marlow, Antony
Stevens, Lewis (Nuneaton)


Mather, Carol
Stewart, Allan (Eastwood)


Maude, Hon Francis
Stewart, Andrew (Sherwood)


Mawhinney, Dr Brian
Stewart, Ian (Hertf'dshire N)


Mayhew, Sir Patrick
Stokes, John


Merchant, Piers
Sumberg, David


Meyer, Sir Anthony
Taylor, John (Solihull)


Miller, Hal (B'grove)
Taylor, Teddy (S'end E)


Mills, Iain (Meriden)
Terlezki, Stefan


Mills, Sir Peter (West Devon)
Thompson, Donald (Calder V)


Moate, Roger
Thompson, Patrick (N'ich N)


Monro, Sir Hector
Thornton, Malcolm


Montgomery, Sir Fergus
Thurnham, Peter


Moore, Rt Hon John
Townend, John (Bridlington)


Morrison, Hon C. (Devizes)
Townsend, Cyril D. (B'heath)


Morrison, Hon P. (Chester)
Trippier, David


Moynihan, Hon C.
Twinn, Dr Ian


Mudd, David
van Straubenzee, Sir W.


Neale, Gerrard
Viggers, Peter


Nelson, Anthony
Waddington, David


Newton, Tony
Walden, George


Nicholls, Patrick
Walker, Bill (T'side N)


Norris, Steven
Wall, Sir Patrick


Onslow, Cranley
Waller, Gary


Oppenheim, Phillip
Ward, John


Oppenheim, Rt Hon Mrs S.
Wardle, C. (Bexhill)


Ottaway, Richard
Warren, Kenneth


Page, Richard (Herts SW)
Watts, John


Parris, Matthew
Wells, Bowen (Hertford)


Patten, Christopher (Bath)
Wells, Sir John (Maidstone)


Pawsey, James
Wheeler, John


Pollock, Alexander
Whitfield, John


Porter, Barry
Whitney, Raymond


Powell, William (Corby)
Wilkinson, John


Powley, John
Winterton, Nicholas


Prentice, Rt Hon Reg
Wolfson, Mark


Price, Sir David
Wood, Timothy


Proctor, K. Harvey
Woodcock, Michael


Rathbone, Tim
Yeo, Tim


Renton, Tim



Rhodes James, Robert
Tellers for the Noes:


Rhys Williams, Sir Brandon
Mr. Michael Neubert and


Ridley, Rt Hon Nicholas
Mr. Archie Hamilton.

Question accordingly negatived.

New Clause 2

TRANSFERS OF SHARES IN COMPANIES PROVIDING DOCKYARD SERVICES

'Any contract made between the Secretary of State and any dockyard contractor shall contain a proviso requiring the transfer to a person or persons not resident in the United Kingdom of any


shares in any company connected directly or indirectly with the provision of dockyard services by the dockyard contractor to be notified to the Secretary of State and where shares subject to such transfer exceed 5 per cent. in number or value of the total share capital of such company or companies, then the Secretary of State shall forthwith terminate the contract'.— [Mr. Denzil Davies.]

Brought up, and read the First time.

Mr. Denzil Davies: I beg to move, That the clause be read a Second time.
New clause 2 is concerned with foreign ownership. I accept entirely that it is not easy to draft foolproof clauses, regulations or articles to cover such an area, and the Government will accept that that is not a defensive statement.
Our first criticism of the Government with regard to foreign ownership is that they have put nothing in the Bill to prevent the foreign ownership and control of assets of national strategic importance. That is not surprising because the Government do not care. They are prepared to sell off almost anything to cobble up a bit of money. The dockyards are an important national asset and I believe that there will be widespread support both in the House and in the country for ensuring that the dockyards do not fall into the hands of foreign countries.
In Committee, the Government said that it was not necessary to deal in the Bill with the question of foreign ownership. They said that their lawyers had come up with a complicated scheme to deal with the problem. No doubt the Minister or the Under-Secretary will tell the House —they have already told the Committee—what that scheme is.
As I understand the scheme, if 30 per cent. of the shares in any one of the consortium companies—I suspect at the end of the day there will be a consortium of some kind —become owned by foreigners, however they are to be defined, there will be some mechanism, at the discretion of the Secretary of State, for the contract to be terminated.
That would not happen automatically. The company apparently has a duty to notify the Ministry of Defence when the shareholding by foreigners has risen to 30 per cent. That is all that happens. Presumably the company will, out of the goodness of its heart, send a note to the Ministry to tell it that the company is now 30 per cent. owned by the Moscow Narodny bank nominees, or whoever it might be. At that point the Secretary of State may study the contract and consider whether he should terminate the contract.
Frankly, for all the high drafting and precision that appears on the surface, these provisions are worth little. They are purely cosmetic. They pretend that the Government are concerned about foreign ownership. The Government have not made a real effort. I shall try to show that. The new clause seeks to put that right.
Thirty per cent. is too high. Of course 30 per cent. is more than 25 per cent., but 25 per cent. is a magical figure when it comes to company law. A shareholding of 25 per cent. in effect represents, as the Government well know, control of a company. Such a holding can block a liquidation or it can block special resolutions. It is no coincidence that, some months ago, Sikorsky-Fiat was aiming for a 29 per cent. share of Westland but there were also stock exchange reasons. With a 29 per cent. shareholding, one is in the driving seat, especially if the other shares are spread widely. We are not talking about

a company where 75 per cent. or 65 per cent. of the shares are held by one person. In consortiums such as Appledore International, Trafalgar House, the Weir Group and various other public quoted companies, there will be a wide spread of shares. It may well turn out that the foreign national or company owning 30 per cent. of shares would be the largest single shareholder, so 30 per cent. is far too high. It does not give the protection that is necessary. The new clause makes it clear that the figure that we would accept is 5 per cent. We accept that there will be changes, in the shareholdings of companies from time to time and 5 per cent.. as the lawyers say, is a kind of de minimis. That would be acceptable, but anything above that would not.
8 pm
Secondly, the duty to notify the Ministry of Defence is far too weak. A legal duty to notify may be written into the contract, but I do not know how that can be enforced. Will the Ministry of Defence sue its contractor? What damage will the Ministry of Defence suffer? The duty to notify is not worth the paper it is written on. We have seen nothing in writing—I do not know whether the details are contained in the documents that we were presented with today—but the duty is to notify when the figure becomes 30 per cent. and it will be too late by then because the holding will have been built up. That really is bolting the stable door after the horse has gone.
The new clause reasonably points out that where there is a transfer of shares to a foreign resident or national—it is possible to find that out — there should be immediate notification, and where that transfer and others come to more than 5 per cent. the axe falls on foreign ownership. The 30 per cent. is too high a figure. The duty to notify is ridiculous, and it is too late at that point because the shareholding has been built up.
The third weakness in the Government's scheme is that the Secretary of State merely has a discretion to terminate the contract. A complex legal arrangement has been built up. The contract contains all the provisions. Lawyers have been richly paid to do all the drafting, yet at the end of the day the Secretary of State has a discretion to terminate a contract with his contractor. That is the only contractor that there is to repair the ships and that contractor's shareholding already stands at 30 per cent. If the contract were then terminated, somebody else would have to he found to do the work, with all the hassle that that would entail.
Does anybody believe that a Secretary of State for Defence would terminate such a contract because of the foreign holding? Certainly this Secretary of State would not. No, Mr. Deputy Speaker, that is nonsense. Ministers have worked hard. The Minister of State looked pained when I criticised his scheme and no doubt the Under-Secretary also feels that he has put long hours into this splendid piece of legal complexity. However, they should not take too much pride in it. It may be good in theory, but it makes no sense in practice.
The new clause provides for a termination of the contract at an earlier stage—when the shareholding stands at 5 per cent., not when it has been built up to 30 per cent. Clearly the Government must think about this again. They must take seriously the view that we must not allow any substantial shareholding from abroad in the royal dockyards. If they are not prepared to put a new


clause into the Bill at this stage, such matters can be dealt with in the other place. The clause would be better in the Bill. That is where it should he. We do not accept that a shareholding of 30 per cent. provides the kind of safeguards that we require.

Mr. Hancock: The points on the new clause were well made in Committee and the right hon. Member for Llanelli (Mr. Davies) spelt out the difficulties that could arise. We must consider the sort of situation in which we might find ourselves. What will happen if control of the royal dockyards falls into the hands of a foreign company holding at least 30 per cent. of the shareholdings? If the company refuses to drop a foreign-held shareholding the provisions in the Bill to terminate will then have to be put into practice. As the right hon. Gentleman said, what will happen to the work in progress? The one thing that we do know is that if the Bill is enacted there will be no turning back the clock. There will be no ready-made labour force and management to step in to fill the gap that will be created once one sets about trying to terminate a contract. What chance does that give of looking sensibly at the way in which the dockyards work? It will be an impossible situation. A seven-year contract may have run for three years when it has to be terminated and then other interested parties will have to be found. We know from Committee of the reluctance of many companies to look seriously at such a situation. More than one hon. Member suggested that strong arm tactics were being used to get people to show some interest. That would be par for the course should a contract be terminated.
It would be a grave dereliction of the Government's responsibility if they were not to act sensibly in the protection of the national interest and the defence of the realm and, more importantly, the conscious giving of control of something as important as our dockyards to foreign companies or people with hostile intent, whether politically or militarily, towards the United Kingdom.
I hope that hon. Members will see the sense of supporting new clause 2. It makes sense now and it did so in Committee. I have yet to hear a sustainable argument from the Government against it. I beg the House to support new clause 2.

Mr. Gordon Brown: The question is whether, in their enthusiasm to transfer the dockyards from public to private control, the Government are inadvertently creating conditions which may transfer the dockyards from British control to foreign control. In recent weeks Conservative Members have filled the House to discuss the importance of British control over the British car industry, and the Conservative party has been divided over who controls the British helicopter industry. Yet it is remarkable that not one Conservative Back-Bencher is present this evening, and only three Conservative Members are present on the Front Bench, when we are discussing legislation that contains not one safeguard against the possibility of foreign control of the royal dockyards. There is not one safeguard in the Bill to prevent or avert the possibility that a foreign company may be entrusted with the responsibility of refitting not only our sophisticated nuclear submarines but our nuclear deterrent. Despite hours of Committee debate on some of these matters and the presentation of various formulae and amended formulae by Ministers, none of my hon. Friends can be

happy with any assurances that have been given about preventing foreign control when the Government are not prepared to include stipulations in the legislation.
Because there are to be no legal guarantees against foreign control, the Government have been retreating daily from their determination to prevent foreign control of the consortiums running either of the dockyards. The original position was set out by the Minister of State in the Second Reading debate on 2 December in response to a question from my right hon. Friend. He said:
tenders would be sought from British companies."—[Official Report, 2 December 1985; Vol. 88, c. 98.]
The assumption that underlay our initial discussion of the Dockyard Services Bill was that no company other than a British-owned and British-registered one would be in a position to bid for the dockyard franchise.
During Committee stage a revised position was presented by the Parliamentary Under-Secretary. He said that to avoid the possibility of foreign control the Government would introduce a stipulation that no more than 30 per cent. of the shares of the consortium could be in the hands of a foreign firm. When we asked how he would eliminate foreign firms that might be interested in the dockyard franchise, and deal with other problems, he said:
The answer … is that the problem will be picked up at the pre-qualification stage, which we are now moving towards.
That stage has come and gone. On the list of companies being invited to tender for the royal dockyards, exclusively as a single company and not as part of a consortium, is a wholly owned American company. The assurance that the problem would be picked up at pre-qualification stage was a bland one. It was one on which the Minister has not yet been able to deliver, at least in the parliamentary answers that he has given.
The Parliamentary Under-Secretary of State then redefined the position again. In reply to a question in Committee he said:
It would be theoretically possible for Foster Wheeler,"—
a wholly owned American company—
or another foreign company, to satisfy the shareholding requirements but come in with financial rather than commercial trading partners."—[Official Report, Standing Committee D; 30 January 1986, c. 376.]
In other words, for all operational purposes the controlling interest could be a wholly owned American company, for technical purposes holding only 29 per cent. or 29·5 per cent. of the shares, but being the only company with the technical expertise that would allow it to succeed in winning the contract.
At first, no foreign companies whatsoever were to tender. Now, the Minister is apparently prepared to contemplate a foreign-owned company bidding for the franchise, going beyond the pre-qualification stage, choosing a few banks and financial institutions to back up its application and to satisfy the shareholding requirement, and being effectively in control of the dockyards at Devonport or Rosyth.
8.15 pm
It is a situation unique in the Western world where an American-owned company that is not in a position to hid for the contracts to run the American shipyards and dockyards is somehow placed in an advantaged position to bid for the contract for the British dockyards. Neither America nor any European country would contemplate the


refitting of its most sophisticated nuclear weapons already in commission by a consortium with a substantial foreign shareholding.
Some of us have had a chance to look, if only briefly, at the documents issued to companies over the past few days. Annexe 4.2 is of special interest. It is headed:
Proposed conditions governing foreign shareholdings in the dockyard company.
It contains the Government's definition of a foreign corporation that would be able to hold up to 30 per cent. of the shares in a consortium running the royal dockyards. In the list of possible foreign corporations to hold shares in the dockyard, we find:
A Government or Governmental Department or Government agency or body other than of the United Kingdom or any part thereof'.
In other words, as well as the fact that, under this legislation and the Minister's own regulations, a foreign, private company may be able to hold up to 30 per cent. of the shares in the consortium, it is also possible that a foreign Government could hold up to 30 per cent. of the shares in the royal dockyards. As far as Britain is concerned we are transferring control from public to private hands, but apparently the Government can contemplate the possibility that another state—perhaps Libya, Argentina or South Africa or another of the countries that might be interested in having refit work done at the dockyards—could become part of the consortium running the royal dockyards. That is the effect of the Minister's statement.
Conservative Members seemed to be concerned about the future of Westland. They seemed determined to keep British Leyland under British control for strategic—they said—as well as financial and employment reasons. I cannot understand how they are prepared to contemplate the possibility of a foreign Government being the major party with a controlling operational interest in the running of the dockyards. Yet in one of the last sittings of the Committee the Minister of State told us that the only sensible criticism that might be made of these arrangements was that they were too restrictive. In other words, he seems to think that it would be better to open the floodgates, to allow foreign companies to hold a higher proportion of the shares, to let foreign Governments do what they want with the royal dockyards and to allow a strategic asset to fall into other people's hands. That is the effect of the statement that he made when we were discussing the stipulations governing foreign control of the franchise.
It is small wonder that the hon. Member for Plymouth, Sutton (Mr. Clark), the Minister for Trade, is not here today. I gather that he has stated to the local newspaper that he is not here because he would be too embarrassed at having to vote against the Third Reading of the Bill. As the Minister may already know, the Minister for Trade has written to the trade unions at Plymouth dockyard saying that his real apprehension is that the fate of the dockyards might be decided by people with no interest in or experience of conditions in the city of Plymouth, and that a great asset may be sold into the hands of strangers.
Perhaps the hon. Member for Sutton, who has had to be silent in debates on this matter in the House, will carry some weight with the Prime Minister when the final decision is made on whether to go ahead with the Bill.
I note that the hon. Gentleman also told the trade unions that
there remains the possibility of a number of detailed changes to the Bill in its passage both in the Commons and in the Lords".
It is precisely such changes that we are proposing today.

Mr. Denzil Davies: The hon. Member for Plymouth, Sutton (Mr. Clark) may not be the only one who has deserted the Government on this issue. There are no Conservative Members on the Back Benches.

Mr. Brown: I do not think that the Government can call on any physical support today outside the Division Lobbies. It is noticeable that some hon. Members from the south-west, whom one might have expected to be here, have absented themselves from the Chamber and also from the Division Lobby. It may be that more hon. Members than the 10 who abstained on Second Reading will abstain on Report and Third Reading. It is a sign of the declining support for the Bill that the Minister who who should be going through the Lobby as a loyal Government supporter has made a public statement to the effect that he could not support the Bill in the Lobby this evening. I mean the Minister for Trade. It is clear that the Minister of State for Defence Procurement is a loyal supporter of the Government and will support them no matter what they say and no matter what wrongs they are doing to our defence forces.
My right hon. Friend the Member for Llanelli (Mr. Davies) mentioned another problem associated with the dangers of foreign control. He mentioned the possibility that during the period of a seven-year contract a greater amount of foreign shares may be put into the consortium. We have to remember that the Ministry of Defence is not committed to re-tendering every seven years. All it wants to retain is the right to re-tender every seven years. The Minister of State was quite clear on 2 December on Second Reading. Where the consortium became subject to foreign influence he said:
In such conditions it would be written into the contract that the company would lose the contract to manage the yards".—[Official Report, 2 December 1985; Vol. 88, c. 98.]
That seemed a clear statement that the contract would contain a clause not that the company might lose the contract to manage the yard but would lose the contract. That statement has been evacuated by the Minister. On 30 January the Under-Secretary told the Committee something totally different. Looking at a number of options open to him in circumstances where a consortium became subject to foreign control, he said:
The third option would perhaps be to allow the new situation to continue as it was in the overall interests of national security…Here, we would obviously take account of the time left for the contract to run, the adequacy of the contractor's performance to date and the nature of the foreign influence involved."—[Official Report, Standing Committee D, 30 January 1986; c. 375.]
In other words, what the Minister said on 2 December is meaningless. It is not something that the Government are prepared to hold to. He misled the House on 2 December and I hope that he will apologise to the House for a statement that has not been justified by events in Committee or by the proposed conditions governing foreign shareholding in the dockyard company. That is a five-page statement which has been sent to the contractors. It goes into great detail about what constitutes a foreign consortium and a foreign shareholding and what 30 per cent. means. It defines foreign corporations, foreign


shareholdings and project contracts. It defines what an "interest" is, and what a Government nominee is. It goes into all that detail and then says that if the contractor or the consortium raises its share above the 30 per cent. limit and does not reduce its shares, if there are transfers of shares between parent companies, if directorships change and we have foreign directors in control the answer is that the authority, meaning the Government, may in their entire discretion terminate the agreement. It does not say would or will but may. In other words, what was said to the House on 2 December by the Minister of State is proved not to be what the Government are now saying to the company. Therefore, no matter what the level of foreign control, what sort of consortium emerges during the period of a contract, how many foreign directors there are or how many foreign Governments buy 5 per cent. or 10 per cent. of shares in the consortium, the Government are leaving it open to decide whether they will or will not leave the dockyard consortium in foreign hands.
That emphasises the point that if the conditions governing foreign control are not enshrined in the legislation we will have evasion and retreat even from the bland assurances that Ministers have given during our debate.
This not an academic argument. One foreign company is already expressing interest. There is the possibility that consortia may be made up by other foreign partners. The Government should realise that there is no more important strategic asset for the maintenance, repair and refit of our defence forces than the royal dockyards. If it is inconceivable that any other country would pass the control of its dockyards from its own native control to foreign control, it should be unacceptable to the Government to allow a foreign consortium to be in a position to be the major partner, no matter what shares it holds, in running British dockyards.
As usual, Ministers wear the clothes of patriots but leave those clothes oddly empty. Having got into a situation where our helicopter industry has passed, in the main, into foreign control, along with many of our other assets, it is the last straw for the Opposition to see the dockyards being put in a position where, inadvertently, through Government neglect and negligence they too may pass into foreign control. If the Government are serious about retaining the dockyards as a British asset for the use of the British defence forces, they would include in the legislation a clause preventing foreign control of the consortia or even a substantial share in the consortia.
The dockyard planning team reports still mention the possibility of refits for foreign navies. Argentina and South Africa are still part of the list that the Ministry of Defence seems prepared to contemplate. If the dockyards are to do work for foreign navies, the least we can expect is that they are not under foreign control. I believe that the Minister should take to heart the warnings that have been given by the Minister for Trade and should accept amendments to the Bill here before the other place includes them as part of its deliberations. If the Government were serious about retaining British control, they would accept the amendment moved by my right hon. Friend the Member for Llanelli.

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee): In essence new clause 2 seeks to provide that the contract between my Department and the successful bidders for the management

of the dockyards will provide that if shares in any company directly or indirectly connected with the provision of dockyard services by the dockyard contractor are transferred to someone not resident in the United Kingdom my right hon. Friend the Secretary of State should be notified. Where the transfer exceeds 5 per cent. in number or value, my right hon. Friend should terminate the contract.
I say with the greatest respect to the right hon. Member for Llanelli (Mr. Davies) and his hon. Friends that this is a narrow, unrealistic and unnecessary reaction. On the assumption that the amendment has been drafted to mean what it says, I doubt very much whether it would even achieve what the right hon. Gentleman and his hon. Friends hope. It is by no means certain that the new clause would prevent any number of transfers, providing each was below the magical 5 per cent. figure, which could result in a transfer to foreign ownership in small stages.
Nor is the new clause very specific about which company or companies it is seeking to constrain. The wording refers to
Any company connected directly or indirectly with the provision of dockyard services by the dockyard contractor
Again, I say with respect that that is pretty loose wording. I shall explain why I believe it is not only loose but misguided. It certainly has very little to do with preventing foreign control of the dockyards which it is clear from what Opposition Members have said is their concern, and the purpose of the new clause.
The clause is also wholly inflexible and as soon as the very low level limit which it sets of the transfer of more than 5 per cent. of the shareholding of any company to non-UK residents is reached, the contract with the dockyard company must be terminated "forthwith". There is no question here of any discretion. There is no question of determining whether such a shareholding amounted to foreign influence — much less foreign control—in the dockyards. There is no question of considering whether any harm would be done to national security or other interests as a result of such a foreign shareholding. The wording of new clause 2 is simply a knee-jerking reaction, typical of the sort of opinions increasingly emerging from the Opposition that if it is foreign it must be bad. Or worse, it is an example of even more anti-Americanism on the part of the Opposition.
Let me make it quite clear that safeguarding national security interests has always been, and will remain, a vital concern in our policy of introducing commercial management into the dockyards. I can say without any hesitation that the idea that what we are proposing somehow puts national security at risk is absolute nonsense. In a moment I shall outline, for the benefit of those who were not on the Standing Committee, what we propose. I am sure that all those who, unlike some Opposition Members, are prepared to listen will accept that we are taking the sort of steps on foreign shareholding that any prudent Government should take.
8.30 pm
The new clause moved by the right hon. Member for Llanelli is at best unclear which company and to what extent it is seeking to constrain. Taken literally, any purchases of even a minute shareholding by an overseas resident in the parent company of the managing company —for example, just two shares in Trafalgar House plc or Babcock International plc—would have to be notified to my right hon. Friend the Secretary of State.
Our proposals require my right hon. Friend the Secretary of State to form a Companies Act company at each dockyard. Each company will have an authorised share capital of £50,001, divided into 50,000 ordinary shares of £1 each and one special share of £1 which my right hon. Friend will retain. The 50,000 shares will be transferred on vesting day to a managing company which will either be whichever company has been successful in tendering to manage that dockyard for the initial period of seven years or, where a consortium has been successful, it will be a company formed and owned by the consortium. All 50,000 shares will be owned for that entire period by the managing company. It is not our intention that anyone other than the managing company should hold those 50,000 shares and that will be in the contract. In the articles of association of the company which my right hon. Friend forms at each dockyard, he will make provision for a special share to be held by or on behalf of himself. The rights attached to that share will ensure that no change is made to the articles of the company or to its memorandum without my right hon. Friend's approval. No change in the ownership of the shares in the dockyard company may be registered without my right hon. Friend's approval. However, I have already said that ownership of the shares in the dockyard company must, under the contract, remain with the managing company for the period of the contract.
On foreign control, therefore, one must consider also the managing companies. I must stress here that we do not propose the privatisation of the dockyards and the transfer to a private company of Government assets. Anyone would think, from the speeches of Opposition Members, that we intend to give away or sell the assets. They will be retained in public hands. To that extent, constraints on foreign shareholdings which were relevant to, for example, British Aerospace are not relevant to the dockyards. In this case, the Ministry of Defence will retain the ownership of the land, buildings, plant and equipment and we shall retain the right to change contractors at the end of the seven-year contract.
As to the protection of information about our naval refitting programme, including—Opposition Members referred especially to this in Committee—information related to nuclear aspects, I can assure the House that the controls which apply to other defence industries—many of which are no less vital to our security than are the dockyards—will apply in full to all companies involved. These controls are those which apply to list X companies, and they have ensured that there has been no threat to national security from, for example, the involvement of companies in our nuclear and other weapons programmes or in the construction of nuclear submarines.
Following the pre-qualification exercise which my Department carried out earlier this year, we published the names of those companies which we would be inviting to tender for the contracts. Last week, the invitation-to-tender documents were issued for Devonport, to a consortium of Trafalgar House, Plessey, A & P Appledore, and to the management-led Devonport Dockyard Limited; and for Rosyth to the Babcock International/Thorn EMI consortium, the Balfour Beatty Weir group consortium, Press Offshore and Northern Engineering Industries.
Of course, the dockyards are of unique strategic importance, and for that reason cannot be regarded in the

same way as any other defence contractor. We have made it clear that we could not accept that the dockyards should be run by foreign companies because of the obvious necessity to protect security interests. The relevant concern, with which the contract will deal, is the shareholding and management structure of the managing company which will, for the period of the contract, own and therefore control the dockyard company employing the work force. Annexed to the invitation to tender, a copy of which has been placed in the Library of the House as hon. Members will gather from earlier deliberations—perhaps better late than never—are draft contractual clauses relating to foreign control. Although they are no more than draft clauses, the principles upon which they operate will not significantly change. Those clauses define, for the purposes of the contract, key terms such as "foreign corporation" and "corporation under foreign control".
I accept that one can debate the shareholding which represents "control" of a company. We are really considering influence and the meaningful control which that may give. It is not, however, as simple as Opposition Members suggest. A shareholder who has 20 per cent. of the issued shares in a company may have considerable influence where no one else has more than 5 per cent.; however, a 20 per cent. interest in the shares of the company having four other shareholders each of whom also has 20 per cent. could hardly be described as a controlling influence. In terms of voting powers at a general meeting, the ability to exercise 51 per cent. of the shares voting is regarded as control. As I have said, for British Aerospace, foreign participation in share capital has been limited to 15 per cent. In yet other contexts, 30 per cent. has been considered to be the shareholding giving rise to control—that is the shareholding in a publicly quoted company at which a mandatory bid must be made under City rules.
Our view is that, given the other safeguards to which I referred—the articles of the companies set up by my right hon. Friend, the fact that without his consent significant articles cannot be changed and shares cannot be transferred, the tried and tested protection which list X procedures afford—the shareholding in the managing company at which we consider, in normal circumstances, a risk to security may begin to arise is 30 per cent.
This is the foregn shareholding in the managing company to which we expect we will, in the interests of security, expect tenderers to conform at the initial bid stage. But whatever the tenderer's proposals are, we shall examine them to satisfy ourselves that security interests will not be prejudiced. If we think that is their effect, we shall not agree to them.
Opposition Members may ask how we shall determine whether shareholding in the managing company is foreign. The answer is that we will look at the parent company which holds it. Under the contract, my right hon. Friend will be entitled to assume, unless the parent company establishes otherwise, that any share in it is foreign held. If foreign held shares in the parent company exceed 30 per cent. it will be considered under the contract to be a corporation under foreign control, and the shares which it will hold in the managing company will also be considered foreign owned. If the parent company is foreign registered, or if its principal place of business is abroad, it will be considered to be a foreign corporation, resulting in its shares in the managing company also being


considered foreign held. We are, therefore, not excluding foreign owned or registered companies or their United Kingdom subsidiaries from joining a consortium to bid to manage the dockyards, though their shares in the managing company will be considered foreign for the purposes of the 30 per cent. level.
The final question to consider is what would happen if the proportion of the foreign shareholding were to rise above the 30 per cent. level. My hon. Friend said on Second Reading that if a company which had been awarded the contract came under foreign control, it would be written into the contract that the company would lose the contract to manage the yards. My hon. Friend went on to say that the precise proportion of shareholding had not then been defined. We have, as I have just said, decided to place the "trigger point" in the managing company at 30 per cent. The contract would not automatically be terminated, but the important point is that the parent company or companies could not assume that it would continue.

Mr. Denzil Davies: The Minister referred to the duty on the company to inform the Secretary of State when shares reach the 30 per cent. level. What sanction does the Secretary of State have on a company if it fails to carry out that duty?

Mr. Lee: If the company fails to carry out that duty of notifying the Secretary of State, and if my right hon. Friend believes that there is a real concern about national security, he can, at his discretion, terminate the contract.

Mr. Gordon Brown: rose—

Mr. Lee: If my right hon. Friend considered that the degree of foreign shareholding was contrary to the interests of security and that action should be taken, he could terminate the contract—and the company would know that. Alternatively, the parent company might be required to reduce the level of foreign shareholding. If, however, my right hon. Friend did not consider that the circumstances were contrary to the interests of security, the management contract would be allowed to continue.

Mr. Brown: Will the Minister explain why, on 2 December, the Minister of State told the House that in conditions of foreign influence and control
it would he written into the contract that the company would lose the contract to manage the yards."—[Official Report, 2 December 1985; Vol. 88, c. 38.]

Mr. Lee: With great respect, I have already covered that point. I explained that the precise percentage for the trigger mechanism had not be defined at that stage.
May I make it clear that in my comments I have dealt with what has been of principal concern in the debate on this new clause, namely, foreign control or influence by virtue of shareholding. The draft foreign control clauses, which are both complex and comprehensive, also address the issue of foreign influence at board level of the managing company. So far as that is concerned, it is our intention that if 30 per cent. or more of the directors of the managing company or the votes they exercise are, to put it very generally, subject to the influence of foreigners or foreign corporations or parent companies under foreign control, my right hon. Friend may act in the same way under the contract as he can if the specified foreign shareholding level has been reached. But, that said, we are not banning foreign directors per se.
I should add that a further contractual safeguard will exist. Whether or not the 30 per cent. limit affecting the shareholding or board of the managing companies has been passed, my right hon. Friend will retain the power to terminate the contract where security interests, justify it if, in his opinion,
any other circumstances whatsoever have arisen which constitute any foreign ownership, control or influence over the managing company".
The potential danger associated with foreign control can and will be avoided by the combined effect of the articles of association of the dockyard companies in which my right hon. Friend will retain a special share, by the standard security procedures covering all defence contracts, and by clauses in the contract giving my Department powers of termination if the degree of foreign control is such as to cause my right hon. Friend to consider that the interests of security are in any way threatened.
I therefore invite the House, with confidence, to reject the new clause.

Mr. O'Neill: Perhaps the Minister can answer one question before he gets too comfortable. He read out a list of companies that had passed the prequalifying stages, but he omitted any reference to Foster Wheeler. Am I right to assume that that wholly owned American company is no longer interested in bidding for the contract for either of the yards?

Mr. Lee: Although I had finished my speech, I am charitable, and am glad to respond as the point has already been raised once. Foster Wheeler is a list X company. It therefore satisfied the prequalification exercise. But it was not sent an invitation to tender because it is a foreign company and it has not formed itself into a consortium that we would find acceptable. Therefore, it is at present a non-runner.

Mr. O'Neill: Although I wish to avoid the charge of being anti-American, the Opposition can at least take some satisfaction from the fact that we exposed a foreign-owned company that was not prepared to change its terms and articles of association, and that as a result it has backed off or been discouraged from applying for the contract.
Due to lack of time, we have been unable to study the provision with the care that the Under-Secretary of State has been able to give it. However, I understand that it contains a catch-all clause to the effect that if the Secretary of State does not, for any reason, like the look of a company, he can terminate the contract in the middle of the seven-year period. It seems unfair and unjust that a company can virtually be subject to the Secretary of State's whim. If it does something that he does not like, there does not seem to be any form of appeal. There is no clear indication of what procedures would be established for examining—

Mr. Norman Lamont: Would the hon. Gentleman care to sort himself out with the hon. Member for Dunfermline, East (Mr. Brown)? The hon. Member for Dunfermline, East has complained that the Government's proposal is far too flexible, and says that we need a catch-all automatic mechanism, but the hon. Member for Clackmannan (Mr. O'Neill) wants the exact opposite.

Mr. O'Neill: I am grateful to the Minister for showing such interest in a debate in which he has not been


participating. However, my hon. Friend the Member for Dunfermline, East (Mr. Brown) did not have the opportunity to hear what the Minister said earlier.
The initial burden of our attack—and it remains the same—was that the figure of 30 per cent. is too high. But, at the end of his speech, the Under-Secretary of State seemed to say that 30 per cent. did not matter, and that the figure could be 1 per cent. If the directors had some sort of brainstorm and started acting in a manner characteristic of foreign nationals, he seemed to say that such a company would be debarred from retaining the contract. But our view is not narrow or unrealistic. We say that a figure of 5 per cent. should be set and that if it is exceeded the Secretary of State should allow termination. We believe that the 5 per cent. figure would provide such a low threshold that the Ministry of Defence would have no difficulty in establishing when it had been breached.
I understand that at present the 30 per cent. level is dependent upon the company letting the Secretary of State know that its shareholding has fallen into foreign hands. The Under-Secretary of State has not disputed the fact that 25 per cent. could give control of a company. As has been pointed out, in such circumstances the figure of 30 per cent. is too high. The recent tangles experienced by the Ministry of Defence and the Department of Trade and Industry with British company law and the ownership of companies suggests that in some circumstances 25 per cent. could easily be recognised as giving control over the company.
We therefore chose what lawyers would call the de minimis figure of 5 per cent. It has a precedent; it affords adequate policing and would enable us to be sure about the companies that we wanted to deal with. There could be no possibility of dawn raids and take-overs of companies unbeknownst even to the directors. The failure of the Department of Trade and Industry adequately to police take-overs and mergers gives us little confidence in the Minister's vague assurances. Given present Government policy, there is no likelihood of the Government exercising any powers that they reserve to themselves under that catch-all provision. This is no more than a bit of sophistry on their part.
We believe that if our defence interests are to be adequately protected, there must be an upper limit of 5 per cent. It would be easily understood by the contracting companies and by the work force. Indeed, workers would be very distressed at the prospect of being employed by those who did not necessarily have the best interests of Britain's defence at heart. Therefore, I ask Conservative Members to join my right hon. and hon. Friends, whom I know will vote in great numbers, in supporting the new clause.

Question put, That the clause be read a Second time:-

The House divided: Ayes 169, Noes 213.

Division No. 121]
[8.48 pm


AYES


Archer, Rt Hon Peter
Benn, Rt Hon Tony


Ashdown, Paddy
Bennett, A. (Dent'n &amp; Red'sh)


Ashley, Rt Hon Jack
Bermingham, Gerald


Atkinson, N. (Tottenham)
Bidwell, Sydney


Bagier, Gordon A. T.
Blair, Anthony


Barnett, Guy
Boothroyd, Miss Betty


Beckett, Mrs Margaret
Boyes, Roland


Beith, A. J.
Bray, Dr Jeremy


Bell, Stuart
Brown, Gordon (D'f'mline E)





Brown, Hugh D. (Provan)
Litherland, Robert


Brown, N. (N'c'tle-u-Tyne E)
Livsey, Richard


Brown, Ron (E'burgh, Leith)
Lloyd, Tony (Stretford)


Bruce, Malcolm
McCartney, Hugh


Buchan, Norman
McKay, Allen (Penistone)


Caborn, Richard
McKelvey, William


Callaghan, Jim (Heyw'd &amp; M)
McNamara, Kevin


Campbell, Ian
McTaggart, Robert


Campbell-Savours, Dale
McWilliam, John


Cartwright, John
Madden, Max


Clark, Dr David (S Shields)
Marek, Dr John


Clarke, Thomas
Marshall, David (Shettleston)


Clay, Robert
Martin, Michael


Clelland, David Gordon
Mason, Rt Hon Roy


Clwyd, Mrs Ann
Maxton, John


Cocks, Rt Hon M. (Bristol S)
Maynard, Miss Joan


Cohen, Harry
Meacher, Michael


Cook, Frank (Stockton North)
Meadowcroft, Michael


Corbett, Robin
Michie, William


Corbyn, Jeremy
Mikardo, Ian


Craigen, J. M.
Millan, Rt Hon Bruce


Crowther, Stan
Miller, Dr M. S. (E Kilbride)


Cunliffe, Lawrence
Mitchell, Austin (G't Grimsby)


Dalyell, Tam
Morris, Rt Hon A. (W'shawe)


Davies, Rt Hon Denzil (L'lli)
Morris, Rt Hon J. (Aberavon)


Davies, Ronald (Caerphilly)
Nellist, David


Davis, Terry (B'ham, H'ge H'l)
O'Neill, Martin


Deakins, Eric
Park, George


Dewar, Donald
Parry, Robert


Dixon, Donald
Patchett, Terry


Dormand, Jack
Pavitt, Laurie


Douglas, Dick
Pike, Peter


Duffy, A. E. P.
Powell, Raymond (Ogmore)


Eadie, Alex
Prescott, John


Eastham, Ken
Radice, Giles


Edwards, Bob (W'h'mpt'n SE)
Randall, Stuart


Evans, John (St. Helens N)
Redmond, Martin


Ewing, Harry
Rees, Rt Hon M. (Leeds S)


Fatchett, Derek
Richardson, Ms Jo


Faulds, Andrew
Roberts, Allan (Bootle)


Field, Frank (Birkenhead)
Robertson, George


Fields, T. (L'pool Broad Gn)
Robinson, G. (Coventry NW)


Fisher, Mark
Rogers, Allan


Flannery, Martin
Rooker, J. W.


Foot, Rt Hon Michael
Ross, Ernest (Dundee W)


Forrester, John
Sedgemore, Brian


Foster, Derek
Sheerman, Barry


Foulkes, George
Sheldon, Rt Hon R.


Fraser, J. (Norwood)
Shore, Rt Hon Peter


Freeson, Rt Hon Reginald
Short, Ms Clare (Ladywood)


George, Bruce
Short, Mrs R.(W'hampt'n NE)


Gilbert, Rt Hon Dr John
Silkin, Rt Hon J.


Godman, Dr Norman
Skinner, Dennis


Golding, John
Smith, Rt Hon J. (M'ds E)


Gould, Bryan
Snape, Peter


Gourlay, Harry
Soley, Clive


Hamilton, W. W. (Fife Central)
Stott, Roger


Hancock, Michael
Strang, Gavin


Harman, Ms Harriet
Thomas, Dafydd (Merioneth)


Hart, Rt Hon Dame Judith
Thomas, Dr R. (Carmarthen)


Haynes, Frank
Thompson, J. (Wansbeck)


Hogg, N. (C'nauld &amp; Kilsyth)
Thorne, Stan (Preston)


Home Robertson, John
Tinn, James


Howell, Rt Hon D. (S'heath)
Torney, Tom


Howells, Geraint
Wallace, James


Hoyle, Douglas
Wardell, Gareth (Gower)


Hughes, Robert (Aberdeen N)
Wareing, Robert


Hughes, Roy (Newport East)
Weetch, Ken


Hughes, Sean (Knowsley S)
White, James


John, Brynmor
Wigley, Dafydd


Kaufman, Rt Hon Gerald
Wilson, Gordon


Kennedy, Charles
Winnick, David


Kilroy-Silk, Robert
Young, David (Bolton SE)


Kirkwood, Archy



Lambie, David
Tellers for the Ayes:


Lamond, James
Mr. Allen Adams and


Leighton, Ronald
Mr. James Hamilton.


Lewis, Terence (Worsley)







NOES


Ancram, Michael
Jones, Gwilym (Cardiff N)


Ashby, David
Jones, Robert (Herts W)


Atkins, Robert (South Ribble)
Jopling, Rt Hon Michael


Beaumont-Dark, Anthony
Joseph, Rt Hon Sir Keith


Best, Keith
Kellett-Bowman, Mrs Elaine


Biggs-Davison, Sir John
Key, Robert


Body, Sir Richard
King, Roger (B'ham N'field)


Boscawen, Hon Robert
Knight, Greg (Derby N)


Bowden, Gerald (Dulwich)
Knight, Dame Jill (Edgbaston)


Brinton, Tim
Knowles, Michael


Buchanan-Smith, Rt Hon A.
Lamont, Norman


Burt, Alistair
Lang, Ian


Carlisle, John (Luton N)
Latham, Michael


Chapman, Sydney
Lee, John (Pendle)


Chope, Christopher
Leigh, Edward (Gainsbor'gh)


Clark, Sir W. (Croydon S)
Lennox-Boyd, Hon Mark


Cockeram, Eric
Lester, Jim


Coombs, Simon
Lewis, Sir Kenneth (Stamf'd)


Cope, John
Lilley, Peter


Couchman, James
Lloyd, Peter (Fareham)


Cranborne, Viscount
Lord, Michael


Currie, Mrs Edwina
Luce, Rt Hon Richard


Dorrell, Stephen
McCrindle, Robert


Douglas-Hamilton, Lord J.
McCurley, Mrs Anna


Durant, Tony
MacKay, Andrew (Berkshire)


Eyre, Sir Reginald
MacKay, John (Argyll &amp; Bute)


Fairbairn, Nicholas
McNair-Wilson, M. (N'bury)


Favell, Anthony
McNair-Wilson, P. (New F'st)


Fenner, Mrs Peggy
Madel, David


Fletcher, Alexander
Major, John


Fookes, Miss Janet
Malins, Humfrey


Forth, Eric
Malone, Gerald


Fox, Marcus
Marlow, Antony


Franks, Cecil
Maude, Hon Francis


Fraser, Peter (Angus East)
Mawhinney, Dr Brian


Freeman, Roger
Mayhew, Sir Patrick


Fry, Peter
Merchant, Piers


Galley, Roy
Meyer, Sir Anthony


Gardiner, George (Reigate)
Miller, Hal (B'grove)


Gardner, Sir Edward (Fylde)
Mills, Iain (Meriden)


Garel-Jones, Tristan
Moate, Roger


Goodlad, Alastair
Monro, Sir Hector


Gorst, John
Montgomery, Sir Fergus


Gow, Ian
Moore, Rt Hon John


Gower, Sir Raymond
Morrison, Hon C. (Devizes)


Grant, Sir Anthony
Morrison, Hon P. (Chester)


Gregory, Conal
Mudd, David


Griffiths, Sir Eldon
Neale, Gerrard


Griffiths, Peter (Portsm'th N)
Nelson, Anthony


Grist, Ian
Newton, Tony


Ground, Patrick
Nicholls, Patrick


Hamilton, Hon A. (Epsom)
Onslow, Cranley


Hamilton, Neil (Tatton)
Oppenheim, Phillip


Hampson, Dr Keith
Oppenheim, Rt Hon Mrs S.


Hanley, Jeremy
Ottaway, Richard


Hannam, John
Page, Richard (Herts SW)


Hargreaves, Kenneth
Parkinson, Rt Hon Cecil


Harris, David
Parris, Matthew


Harvey, Robert
Patten, Christopher (Bath)


Haselhurst, Alan
Pawsey, James


Hawkins, C. (High Peak)
Pollock, Alexander


Hawksley, Warren
Porter, Barry


Hayes, J.
Powell, William (Corby)


Hayhoe, Rt Hon Barney
Rowley, John


Heathcoat-Amory, David
Prentice, Rt Hon Reg


Heddle, John
Price, Sir David


Henderson, Barry
Proctor, K. Harvey


Hickmet, Richard
Rathbone, Tim


Hill, James
Renton, Tim


Hind, Kenneth
Rhodes James, Robert


Hogg, Hon Douglas (Gr'th'm)
Rhys Williams, Sir Brandon


Holland, Sir Philip (Gedling)
Ridley, Rt Hon Nicholas


Holt, Richard
Roberts, Wyn (Conwy)


Hordern, Sir Peter
Robinson, Mark (N'port W)


Howarth, Alan (Stratf'd-on-A)
Roe, Mrs Marion


Howell, Rt Hon D. (G'Idford)
Rossi, Sir Hugh


Howell, Ralph (Norfolk, N)
Rowe, Andrew


Hubbard-Miles, Peter
Rumbold, Mrs Angela


Jessel, Toby
Ryder, Richard





Sackville, Hon Thomas
Townend, John (Bridlington)


Shaw, Giles (Pudsey)
Townsend, Cyril D. (B'heath)


Shaw, Sir Michael (Scarb')
Trippier, David


Shelton, William (Streatham)
Twinn, Dr Ian


Shepherd, Colin (Hereford)
van Straubenzee, SirW.


Shepherd, Richard (Aldridge)
Waddington, David


Shersby, Michael
Walden, George


Silvester, Fred
Walker, Bill (T'side N)


Sims, Roger
Wall, Sir Patrick


Skeet, Sir Trevor
Waller, Gary


Soames, Hon Nicholas
Ward, John


Spencer, Derek
Wardle, C. (Bexhill)


Spicer, Jim (Dorset W)
Warren, Kenneth


Spicer, Michael (S Worcs)
Watts, John


Stanbrook, Ivor
Wells, Bowen (Hertford)


Stanley, Rt Hon John
Wells, Sir John (Maidstone)


Steen, Anthony
Wheeler, John


Stern, Michael
Whitfield, John


Stevens, Lewis (Nuneaton)
Whitney, Raymond


Stewart, Allan (Eastwood)
Wilkinson, John


Stewart, Andrew (Sherwood)
Winterton, Nicholas


Stewart, Ian (Hertf'dshire N)
Wolfson, Mark


Stokes, John
Wood, Timothy


Sumberg, David
Woodcock, Michael


Taylor, John (Solihull)
Yeo, Tim


Taylor, Teddy (S'end E)



Terlezki, Stefan
Tellers for the Noes:


Thompson, Patrick (N'ich N)
Mr. Michael Neubert and


Thornton, Malcolm
Mr. Donald Thompson.


Thurnham, Peter

Question accordingly negatived.

New Clause 3

EQUALITY OF PENSION RIGHTS

'Where in pursuance of the arrangements referred to in section 1(2) hereof a qualified dockyard service employee ceases to be employed in the Civil Service of the Crown and becomes employed by a company all pension arrangements made by such company shall be equivalent in all respects to such pension arrangements as applied in the Civil Service of the Crown.'—[Mr. O'Neill.]

Brought up, and read the First time.

Mr. O'Neill: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Harold Walker): With this we may discuss new clause 4—Redundancy Fund: payments for dockyard workers—
'In pursuance of the arrangements made hereunder the Secretary of State shall out of money provided by Parliament set up a redundancy fund for the benefit of all qualified dockyard employees declared redundant after the transfer of the dockyard undertaking and payments made out of such fund shall be no less in amount and value than payments that otherwise would have been made under the Superannuation Act 1972.'.

Mr. O'Neill: New clauses 3 and 4 relate to the pension rights and redundancy arrangements which employees of the new contracting companies are likely to experience. We want to afford such employees the same conditions of employment as prevail in the Civil Service. We would like to think that there would be no diminution in pension rights.
For most working people, pensions are merely deferred wages. They are in many respects the only savings that many working people make. The savings are held in trust by management. It is sometimes suggested that they are provided by the grace and favour of management, but they are sometimes a substitute for pay and better conditions. People are often encouraged to accept the possibility of a pension on retirement in preference to a 1 or 2 per cent. increase in wages.
Pensions are often a barrier to mobility. That argument might be stronger in days of full employment, but pensions are nevertheless a consideration when a worker contemplates moving to other employment. Management are often prepared to pay in future for the advantage of lower wage bills today and a stable work force such as is established when people regard a good pension as a barrier to mobility.
The pension arrangements that have been granted to public service employees have become a right. The result of contractorisation is a denial of a right. The pension arrangements presently enjoyed by the work force in the dockyards are not privileges but rights and they should not be removed at the whim of legislators. It could be said that the removal of such basic employment rights is nothing more or less than expropriation without adequate consultation. Those who are in employment bitterly resent the fact that the terms and conditions of anybody who is recruited after contractorisation will be inferior to the rights enjoyed by those who are already employed.
New clause 4 provides for a redundancy fund for dockyard workers. If there are redundancies after contractorisation, the new clause will provide adequate financial provision for them. Anybody who is made redundant after contractorisation will be provided for at a level which is not inferior to that provided for those dockyard workers who will be made redundant in the next few weeks or months. We know that 3,000 voluntary redundancies are being sought.
When privatisation takes place, there is usually a considerable reduction in the labour force. We have discussed the savings and the costs which could be incurred after contractorisation. There is disagreement about how the savings could be achieved, but it is not disputed that if any savings are to be achieved they will probably be achieved by a reduction in the dockyard work force.
There has been privatisation in other areas of defence, most notably in the case of the royal ordnance factories. The amount of money that has been provided for redundancy payments has been almost exhausted. Additional funds will probably have to be provided from one source or another. Because of the nature of the contracting companies and their relationship with the employing organisations, if there have to be further redundancies, apart from those which have already been announced prior to contractorisation, they will probably be achieved only at the expense of the redundancy payments which are now being offered to the work force. The new clause is being moved to ensure that redundancy payments will continue to be made at the present level.
The Minister did not suggest that more money will be made available for those individuals. A fair number of the redundancies that have been called for will probably be achieved. When large numbers of redundancies are called for, many of the older employees seek what is really early retirement. However, the contracting companies could run out of older men who are prepared to take early retirement. The amount of redundancy money that is provided then becomes a critical factor in the negotiations on labour reductions. Certainly we have not yet been satisfied by the Government's remarks this afternoon. I use the word "remarks" because the Government have been extremely coy about being specific on any figures. They have said

that, for reasons of commercial confidentiality and for other reasons, they are not prepared to be specific as to the sums involved.
For the people who are at present employed in the firm, this must be extremely distressing, and new clause 4, in respect of a redundancy fund, is an attempt to allay the fears and anxieties of some members of the work force who believe that they could be told that their jobs no longer existed and that the rates of compensation for the service that they have given to the dockyards would not be on all fours with what is being paid at the moment.
These two new clauses deal with the problems that have occurred with previous privatisation. So far the Government have said that, by and large, they hope that there will be no deterioration in the working conditions enjoyed by workers after the protection of, in this case, the Civil Service is removed. Frankly, we are not reassured by the Government's remarks on these matters. We feel that, if they mean what they say, they ought to be giving effect to their words by having far stiffer provisons in this piece of enabling legislation.
The absence of these provisions and commitments required us to place new clauses 3 and 4 on the Amendment Paper, and we hope that hon. Members on all sides of the House will support them. They have been welcomed by the representatives of the work people, who see them as filling a gap in the present proposals. I believe that they will go some way towards alleviating the difficulties which any contracting company will have to face. As we have said, many costs can be calculated, but one of the major difficulties which a contracting company will face is resentment, and the suspicion that it will be trying to make savings and profits not just out of more effective and efficient work practices but out of the work people themselves.
It is for these reasons that we believe that it would make a substantial contribution to improving industrial relations if there were adequate provision for pensions and redundancy arrangements in any future contractorisation scheme. We are not confident that the existing financial framework within these companies will provide anything like the opportunities for profit which the Government are suggesting. We fear that these opportunities for profit, if they are to be created, will be created at the expense of the wages, conditions, redundancy arrangements and pensions of the work force.
I therefore commend these new clauses to the House in the hope that, in the interest of better industrial relations, they will be accepted.

Mr. Hancock: In Committee, when this part of the Bill was discussed, the Parliamentary Under-Secretary of State said that the Government intended to set up arrangements which mirrored the existing pension and redundancy arrangements. That sounded very good at the time, but we have yet to get clarification of exactly what he intended to do. The new clause gives an opportunity for the House to give the reassurance which is undoubtedly needed by the work force both in Rosyth and in Devonport.
The Minister should accept the new clauses because he has already committed the Government, if we are to believe what he told us in Committee, to maintaining a pension scheme that is the same as the Civil Service scheme that operates at present and that dockyard


employees are now in, so that there should be no detrimental effects upon them. I think that we have to insist that we get clarification of exactly what will happen.
New clause 3 simply guarantees that the pension rights of dockyard employees transferred to a new company will remain the same as they have been in the Civil Service. That is not too much to ask for anybody who has given dedicated service to the Government in the dockyards. I hope that we can consider that, not with sympathy but with realism, and agree that that sort of assurance about protected pension rights is essential. As the hon. Member for Clackmannan (Mr. O'Neill) said, for many people the pension at the end of a working career is critical when considering employment. Many people would like the norm in Government service to continue, and have a right to it.
9.15 pm
As they stand, the conditions of service for dockyard workers transferred to a new company will not be adequately protected. That applies particularly to pension arrangements, and we seek to clarify that today. Time and again the dockyard unions have spouted out to Opposition Members, and, indeed, to every member of the Committee, information about their anxieties over the future pension rights of their members.
New clause 4 follows the same line, and guarantees redundancy payments equivalent to the present arrangements funded by the Government under the Superannuation Act 1972. The Government intend to negotiate with the contracting companies arrangements which are as good as those applicable under the personal Civil Service pension scheme. Again, we seek assurance that that is exactly what will happen, and that the contracting companies will accept that, not as a negotiating right, but as a built-in part of contractual arrangements, and will guarantee the rights and future redundancy payments of the work force.
Earlier, we heard of the problems that could occur if a sizeable percentage of the company was taken over by foreign interests. When we asked the Minister what action the Government would take if that happened, he said clearly that it would mean termination. If termination means redundancy, as I fear it undoubtedly will in some cases, the House has an obligation today to ensure that the redundancy payments due to those people are no different from what they are today.
I hope that the House sees the logic and sense behind that, and the need for fair play in guaranteeing the work force their pension rights and redundancy payments. There can be no alternative. The House must accept the two new clauses and vote for their inclusion in the Bill.

Mr. Douglas: It is difficult for the House to realise what is involved in the passage of the Bill. This is the first time in any form of privatisation that, not the physical assets of the dockyards, but the labour force is being transferred from the Ministry of Defence. The concept involves a managing company with the dockyard companies' only assets, to use the word loosely, the employees. The managing companies will take over the dockyard companies as wholly owned subsidiaries.
When we probed the Minister in Committee about pensions, and particularly redundancies, he gave us the impression that the financial background of any consortium taking over the dockyard companies and its ability to fund any subsequent redundancies would be

carefully examined. There is no evidence in the tendering documents or from inquiries that that sort of searching investigation has taken or will take place.
In relation to what the companies are asked to do in terms of redundancies, I quote from the invitation to tender and main annexes:
Details of redundancy provisions which were transferred under TUPE '81 and which should be taken into account by tenderers … are in annex 6/4.
Annexe 6/4 uses a startling phrase in relation to new entrants:
The level of redundancy scheme benefits shall be consistent as far as possible with that applicable to other employees of the contractor and with good practice within related sectors of industry.
What exactly does that mean in terms of the redundancy scheme? The first blow, as it were, can be taken by the public purse. We understand that. We understand in relation to Rosyth and Devonport that the redundancy payments are those expected by Civil Service employees.
The next tranche theoretically would be taken by the public purse because the sums passed on in terms of the Bill would be passed on in one way or another to the dockyard employing companies, although the dockyard employing companies would have a shareholding of only 50,000 plus one golden share. However, assuming that some of these companies employ individuals, there is no obligation to have these redundancy provisions for the new entrants on all fours with the existing employment of the dockyard company. All that is understood by the contractor is that the redundancy provisions for the new entrants would be consistent as far as possible with those in his employment, not with those employed by the dockyard company.
This is an important distinction. There is a possibility under the tender documents of having two classes of employee. We must decide whether to take these documents seriously. We got them only this afternoon and, because we have to read them quickly, we may get the wrong idea. Earlier this evening, I alluded to the DGSR being responsible for day-to-day project management, and the Minister of State, in his wisdom, shook his head and said that that would not happen. Should we take these documents seriously or not?
I put it to the Minister that under the tender documents it is possible to have two classes of employee. Such a situation will certainly produce many effects, but it will not produce harmony in the dockyards. The Minister of State is obligated at this late stage of the Bill to give us some assurances. He must give the employees some assurances about the long-term prospects in relation to pension rights and redundancy payments.
If there are to be two classes of employee, let us hear about it here and now; let us not have any pussy-footing about. Let us hear that this House is passing an enabling Bill to give the Government some authority to say to contractors, "The first time around, be good boys and everyone must be on all fours with the existing Civil Service arrangements but later, even during the period of the seven-year contract, you could have two classes of employee.". The right hon. Member for Plymouth, Devonport (Dr. Owen) raised an important point about the next round. The same contractor might not be fortunate—or unfortunate—enough to bid in terms of continuity. What happens then to the redundancy scheme? Do we then have to accept a redundancy and/or pension scheme that is consistent with the best practices within industry? The


Government are trying by sleight of hand to make savings through cheeseparing with pension arrangements or redundancy provisions. We are dubious about those savings.
I support the thrust of the two new clauses. The Minister of State has the opportunity to clear the air now before the Bill goes to the other place.

Mr. Norman Lamont: The criticisms of the hon. Member for Clackmannan (Mr. O'Neill) were essentially the same, although in a slightly lower key, as the criticisms made in Committee. I cannot satisfy hon. Members in every respect, but I believe that the anxieties and fears expressed in Standing Committee were exaggerated. Much of what was said about the possibility of worsening conditions of employment was unfounded. I did not and I do not want to give rise to unnecessary fears.
In providing for the introduction of commercial management in the dockyards, the Bill treats the transfer of employees to the dockyard companies as a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 1981 apply. Those regulations essentially safeguard employees' rights when a business or undertaking is transferred to a new owner—thus the new owner takes over the contracts of employment of all the employees. There is no picking and choosing. All the collective agreements are in force. It is as though the contracts of employment with the previous employer had from the start been made with the new employer. This means, for individual dockyard employees, that, on their first day of employment with the new dockyard company, with the exception of some aspects deriving directly from Crown service, their terms and conditions of service will be the same as if they were in the Civil Service.
This has led some hon. Members to see TUPE as something of a qualified blessing. It provides protection on the first day but offers no kind of guarantee thereafter. I do not think it should. That would be absurd. [Interruption.] I shall spell out in more detail precisely what we are doing. Hon. Members are either interested in these points or they are not. It would be absurd if the effect of the regulations were to continue to apply permanently to a new employer criteria deriving from his predecessor. All employers at some time wish to prepare and negotiate changes to terms and conditions. It is the essence of the Bill that it enables the dockyards to be managed outside the Civil Service in a commercial environment with the commercial manager accepting the full responsibility for managing the terms and conditions of his company.
It was pointed out in Committee that TUPE does not apply to pensions. We intend to set up pension schemes, one at each dockyard, for transferred employees to reproduce —hon. Members objected when my hon. Friend the Under-Secretary of State for Defence Procurement used the word "replicate"—as closely as possible the provisions of the principal Civil Service pension scheme. It is not possible—this was explained in Committee but was not fully taken on board—to reproduce the PCSPS in its entirety.
The PCSPS is statutorily based and certain payments can be made out of it which private sector schemes, set up as they are under trustees and governed by Inland Revenue regulations, cannot parallel. The right hon. Member for Llanelli (Mr. Davies) accepted this with respect to

redundancy payments, but it is not just a matter of redundancy payments. There are certain other types of provisions. For example, the way widows are treated is something that could not be mirrored in an Inland Revenue approved scheme. That is why we have used the words, both now and earlier on in Committee, "reproducing as fully as possisble".

Mr. Douglas: rose—

Mr. Lamont: With regard to pensions, we intend to see that schemes are set up which embody the same calculations of retirement benefits, reckonable service and pensionable pay as the PCSPS. The scheme would allow, for the same index-linking and retirement age, all the same factors.
Shortly, we will be issuing a consultative document about pensions, which will set out the scheme that we envisage. It will describe the nature of the transfer scheme and the options open to civil servants transferring to the dockyards in regard to their accrued benefits. It will describe the actions that will have to be taken to set up the funds. The question of contributions will be discussed with the trade unions and contractors. The initial contribution rate is likely to be about 16 per cent. of the pensionable pay of the members of the schemes. We will obviously discuss this with the trade unions when we have issued the consultative documents.

Mr. Douglas: I am grateful to the Minister, and I apologise for interrupting him. These are very complicated matters. Am I correct in assuming that the employing company would, at all times, be the dockyard company? That is the company with which, at the end of the seven years, the Secretary of State or whoever would renegotiate terms of contracts. Why are the Government implying that there may be variations in TUPE over the period if the employing company is the permanent employer of the dockyard employees? Why should there be variations over a seven-year period or several seven-year periods?

Mr. Lamont: I am sorry—would the hon. Gentleman repeat his question on variations?

Mr. Douglas: I accept that these are complicated matters. If the employer of the dockyard employees is the dockyard company plc, that is a continuing entity. The contractors are not continuing entities. Why should there be provision for variations in either redundancy payments or pensions throughout the period? Why should there be differences for new entrants? Why can we not have consistency in relation to the TUPE regulations throughout the period?

Mr. Lamont: I think I have explained the philosophy. If a company is in the private sector, it would be inappropriate to embody in law something that is going on in perpetuity. It is as simple as that.
There will be a legal safeguard as regards TUPE. The hon. Member for Dunfermline, West (Mr. Douglas) is quite right in what he says about the distinction between new entrants and existing employees. That is not to say that people will automatically make a distinction between new entrants and existing employees, but it is something that, theoretically, could happen. That is the simple reason why we would not put in the Bill the sort of provision enshrined in the amendment.
The pension schemes will be funded schemes. The Government will pay a transfer payment in respect of the past service of those employees who elect to transfer their past service rights into the scheme. Thereafter, contributions will be made from employer and employees and the assets will be invested. The funds will have trustees who will be independent of the dockyard companies. They will be managed by a trustee body whose board will include persons nominated by the dockyard company, the commercial manager, the Government and the members of the scheme. Those trust funds will be a secure basis for the future of the pensions of the ex-civil servants employed by the dockyard companies.
Given all that, one could argue that the amendment is a worthwhile addition to the Bill. Placing a statutory guarantee over the pension arrangements would be a suitable reinforcement of the intentions inherent in setting up the schemes. But, as I have explained, such an argument would be misguided. The management of the funds will rest with the trustee boards, which will have the same responsibilities, such as investment, as any pensions trustee board in the private sector. Just as it is appropriate to ensure that the commercial manager has responsibility for the terms and conditions of service governed by the TUPE regulations, so it would be inappropriate to superimpose on the trustee boards a requirement in law to maintain benefits which permanently tie the schemes to the PCSPS and would be incompatible with the trust fund arrangements.
The Government are determined that the arrangements for the initial funding, benefits and management of the scheme will be secure, but the ongoing management of the scheme lies properly with the trustees. The object of the Bill is to enable the dockyard to be run in a commercial manner outside the Civil Service. In that sense, the amendment goes against the overall aim.
New clause 4 is not dissimilar in its intentions, in particular on the funding of redundancy compensation. Procedures for declaring and managing redundancies in the Ministry of Defence follow the overall Civil Service pattern and are set out in the Ministry's staff manual. They cover such matters as the order in which staff are made redundant, fields of redundancy, length of notice and so on. Again, under TUPE, those proceedings will transfer to the new employer with such changes as are necessary to reflect the fact that the dockyards will then be two separate and independent commercial companies rather than part of the Civil Service. But overall they will be largely unchanged and the new employer will operate those procedures until change is negotiated. Redundancy compensation in the Civil Service is calculated on a basis related to length of service and levels of pay. The benefits are set out as a chapter of the PCSPS rules.
I have previously referred to the Inland Revenue rules governing private sector pension schemes and to the factor, which the right hon. Member for Llanelli acknowledged, that the rules do not allow for redundancy compensation levels as set out to be paid out of pension funds. That means that compensation for any staff who are made redundant after vesting day will, in the new companies, have to be paid out of company funds. That is the point to which right hon. and hon. Members objected in Committee. It is the standard practice in the private sector. However, just as redundancy procedures will

transfer to the new company, so will the need to provide levels of compensation as good as those in the Civil Service.
Here again, there are some areas where precise resolution will have to be discussed with the unions, the contractors and the Inland Revenue. But the overall intention will be to set up a scheme paying redundancy benefits either exactly the same or of equivalent value, and reckonable service accrued under the Crown will not be lost. An ex-civil servant made redundant by the dockyard company after vesting day will be paid compensation calculated on the total length of service with the company and with the Civil Service.
The right hon. Gentleman asked about redundancy having to be borne by the companies. I made the point that that was what normally happened in the private sector. As I am sure right hon. and hon. Members are aware, under the rules for winding up a company, a certain priority is given to redundancy payments. But if the astonishing happened and the contractor, who had been awarded the contract, went bankrupt, the Government would be taking over the assets and the labour force would transfer back. I think that that is an extremely unlikely contingency but that the answer I have given meets it.

Mr. Denzil Davies: I understand the Minister's point. The contingency may well be unlikely. However, our concern is not what happens if the company goes into liquidation but what happens if, after vesting day, the company declares redundancies. I think that the Minister has said that there will be negotiations to try to provide a level of redundancy payment more or less comparable to the present Civil Service scheme. We understand that, but we want to know where the money is to come from. There will be a company with one contract. In the case of pensions, the money will come in the end from the Ministry of Defence, by way of an extra charge. Will the money for future redundancies also be added to the bill and come, in effect, from the Ministry of Defence?

Mr. Lamont: The right hon. Gentleman has quickly summed up the situation. We have never disguised the fact that the cost of any redundancies, if there are any, will have to be funded by the contractor. Prior to vesting day, they would be paid for by the Government; after vesting day, by the company.
The right hon. Gentleman is moving on to a different point of concern. I have answered his previous point. He said in Committee that the real danger was that the company would not be able to meet—

Mr. Davies: rose—

Mr. Lamont: I will answer the second point too. I am only pointing out that when I answer one point, the right hon. Gentleman dances round to another one. Both points are serious, and there are answers to both.
The right hon. Gentleman's original point was about the viability of the company. As regards the level of benefit after the transfer of the employees, TUPE applies, and the company will have to pay the same levels of redundancy benefit. It may subsequently negotiate with the trade unions again. However, many of the benefits—not necessarily the level of redundancy pay—have been negotiated. They are not all built into statute.

Mr. Davies: Let us suppose that, a year after vesting day, one of the two companies declares 1,000 people


redundant, and that there has been no renegotiation of redundancy payments. The Minister says the TUPE applies and that the level of redundancy payments made to the 1,000 people will be more or less equal to what they would have received from the Civil Service pension scheme.
My question is simple. Where will the company find the money? The problem is the same as the problem of funding pensions. The company has nothing except a contract. Will that contract contain an extra increment to cover such an eventuality?

Mr. Lamont: I answered that point quite directly. The money comes out of the company's income—its cash flow. I repeated that a few moments ago. I admitted the logic of what the right hon. Gentleman had said. That has been taken account of in the costings. It is taken account of in the global figures that I gave on the first new clause.
I am trying to calm down some of the fears about lack of adequate benefit. Some of the comments made in Committee, which have not been repeated, I am glad to say, on the Floor of the House—

Mr. Hancock: indicated assent.

Mr. Lamont: I see that the hon. Member for Portsmouth, South (Mr. Hancock) realises that what I say is realistic. The cost will fall on the company. That is entirely in line with the practice in industry. Any employer must assess the economic implications for the company of declaring staff redundant. So will the dockyard company. Companies bidding for the contract will have to estimate the need for, and cost of, any redundancy and include that in their business planning. They will have to meet those costs from their own income and funds. That income will come from the customers, as the right hon. Member for Llanelli pointed out.
The proposed new clause also seeks statutorily to impose the same levels of redundancy compensation on the company. The same amendments have been tabled to this clause as for that on pensions. For the reasons I have outlined, I cannot accept them, but I stress once again that the Government have been mindful of the interests of the employees in the dockyards. We are concerned to see dockyard companies set up which safeguard continuity of employment and employees' interests in respect of conditions of service, redundancies and pensions. I do not believe, despite what was said in Committee, that there is any real ground for anxiety. Therefore, I invite the House to reject the new clauses.

Mr. O'Neill: The Minister gave the game away in the last couple of minutes when he said that the income to meet the cost of redundancies will have to come from the customers. The customer in this case is the Ministry of Defence. At present, the money comes not from the Ministry of Defence but from the principal Civil Service pension scheme which, as I understand it, is funded by the Exchequer. Therefore, if the Government are telling us that they are making alternative arrangements for post-vesting day, we have to conclude that they have made some calculation of likely redundancy figures in the early years after vesting day. We know that those figures have

been surmised and suggested. It is a measure of the Government's lack of confidence in the proposals that they are refusing to let us know those figures today.
It is clear that these two clauses are necessary, because we do not share the confidence of the Government that everything will eventually be all right. We do not share their view that there is some prospect that, after vesting day, the legislation which these two new clauses will provide in perpetuity will be to the disadvantage of the working people who are employed in the dockyards at present.
We have been told repeatedly that the Government do not want the hands of the new employers to be tied. We do not share that view if it means that the wages and conditions of the pension and redundancy arrangemens of the employees of the new organisations will be deleteriously affected by the process of privatisation. It is for those reasons that I call on my right hon. and hon. Friends to support the new clauses.

Question put, That the clause be read a Second time:—

The House divided: Ayes 175, Noes 214.

Division No. 122]
[9.48 pm


AYES


Adams, Allen (Paisley N)
Dixon, Donald


Archer, Rt Hon Peter
Dormand, Jack


Ashdown, Paddy
Douglas, Dick


Ashley, Rt Hon Jack
Duffy, A. E. P.


Atkinson, N. (Tottenham)
Eadie, Alex


Bagier, Gordon A. T.
Eastham, Ken


Barnett, Guy
Edwards, Bob (W'h'mpt'n SE)


Beckett, Mrs Margaret
Evans, John (St. Helens N)


Beith, A. J.
Ewing, Harry


Bell, Stuart
Fatchett, Derek


Benn, Rt Hon Tony
Faulds, Andrew


Bennett, A. (Dent'n &amp; Red'sh)
Field, Frank (Birkenhead)


Bermingham, Gerald
Fields, T. (L'pool Broad Gn)


Bidwell, Sydney
Flannery, Martin


Blair, Anthony
Foot, Rt Hon Michael


Boothroyd, Miss Betty
Forrester, John


Boyes, Roland
Foster, Derek


Bray, Dr Jeremy
Foulkes, George


Brown, Gordon (D'f'mline E)
Fraser, J. (Norwood)


Brown, Hugh D. (Provan)
Freeson, Rt Hon Reginald


Brown, N. (N'c'tle-u-Tyne E)
George, Bruce


Brown, R. (N'c'tle-u-Tyne N)
Gilbert, Rt Hon Dr John


Brown, Ron (E'burgh, Leith)
Godman, Dr Norman


Bruce, Malcolm
Golding, John


Buchan, Norman
Gould, Bryan


Caborn, Richard
Gourlay, Harry


Callaghan, Jim (Heyw'd &amp; M)
Hamilton, James (M'well N)


Campbell, Ian
Hamilton, W. W. (Fife Central)


Campbell-Savours, Dale
Hancock, Michael


Carlile, Alexander (Montg'y)
Harman, Ms Harriet


Cartwright, John
Hart, Rt Hon Dame Judith


Clark, Dr David (S Shields)
Haynes, Frank


Clarke, Thomas
Healey, Rt Hon Denis


Clay, Robert
Hogg, N. (C'nauld &amp; Kilsyth)


Clelland, David Gordon
Home Robertson, John


Clwyd, Mrs Ann
Howell, Rt Hon D. (S'heatn)


Cocks, Rt Hon M. (Bristol S)
Howells, Geraint


Cohen, Harry
Hoyle, Douglas


Cook, Frank (Stockton North)
Hughes, Robert (Aberdeen N)


Corbett, Robin
Hughes, Roy (Newport East)


Corbyn, Jeremy
Hughes, Sean (Knowsley S)


Craigen, J. M.
John, Brynmor


Crowther, Stan
Kaufman, Rt Hon Gerald


Cunliffe, Lawrence
Kennedy, Charles


Dalyell, Tam
Kilroy-Silk, Robert


Davies, Rt Hon Denzil (L'lli)
Kirkwood, Archy


Davies, Ronald (Caerphilly)
Lambie, David


Davis, Terry (B'ham, H'ge H'l)
Lamond, James


Deakins, Eric
Leighton, Ronald


Dewar, Donald
Lewis, Terence (Worsley)






Litherland, Robert
Robertson, George


Livsey, Richard
Robinson, G. (Coventry NW)


Lloyd, Tony (Stretford)
Rogers, Allan


McCartney, Hugh
Rooker, J. W.


McKay, Allen (Penistone)
Ross, Ernest (Dundee W)


McKelvey, William
Sedgemore, Brian


McNamara, Kevin
Sheerman, Barry


McTaggart, Robert
Sheldon, Rt Hon R.


Madden, Max
Shore, Rt Hon Peter


Marek, Dr John
Short, Ms Clare (Ladywood)


Marshall, David (Shettleston)
Short, Mrs R.(W'hampt'n NE)


Martin, Michael
Silkin, Rt Hon J.


Mason, Rt Hon Roy
Skinner, Dennis


Maxton, John
Smith, C.(Isl'ton S &amp; F'bury)


Maynard, Miss Joan
Smith, Rt Hon J. (M'ds E)


Meacher, Michael
Snape, Peter


Meadowcroft, Michael
Soley, Clive


Michie, William
Steel, Rt Hon David


Mikardo, Ian
Stott, Roger


Millan, Rt Hon Bruce
Strang, Gavin


Miller, Dr M. S. (E Kilbride)
Thomas, Dafydd (Merioneth)


Mitchell, Austin (G't Grimsby)
Thomas, Dr R. (Carmarthen)


Morris, Rt Hon A. (W'shawe)
Thompson, J. (Wansbeck)


Morris, Rt Hon J. (Aberavon)
Thorne, Stan (Preston)


Nellist, David
Tinn, James


O'Neill, Martin
Torney, Tom


Owen, Rt Hon Dr David
Wallace, James


Park, George
Wardell, Gareth (Gower)


Parry, Robert
Wareing, Robert


Patchett, Terry
Weetch, Ken


Pavitt, Laurie
White, James


Pike, Peter
Wigley, Dafydd


Powell, Raymond (Ogmore)
Wilson, Gordon


Prescott, John
Winnick, David


Radice, Giles
Young, David (Bolton SE)


Randall, Stuart



Redmond, Martin
Tellers for the Ayes:


Rees, Rt Hon M. (Leeds S)
Mr. John McWilliam and


Richardson, Ms Jo
Mr. Mark Fisher.


Roberts, Allan (Bootle)





NOES


Ancram, Michael
Gardner, Sir Edward (Fylde)


Arnold, Tom
Garel-Jones, Tristan


Ashby, David
Goodlad, Alastair


Atkins, Robert (South Ribble)
Gorst, John


Beaumont-Dark, Anthony
Gow, Ian


Best, Keith
Gower, Sir Raymond


Body, Sir Richard
Grant, Sir Anthony


Boscawen, Hon Robert
Gregory, Conal


Bowden, Gerald (Dulwich)
Griffiths, Sir Eldon


Brinton, Tim
Griffiths, Peter (Portsm'th N)


Buchanan-Smith, Rt Hon A.
Grist, Ian


Burt, Alistair
Ground, Patrick


Carlisle, John (Luton N)
Hamilton, Hon A. (Epsom)


Chope, Christopher
Hamilton, Neil (Tatton)


Clark, Sir W. (Croydon S)
Hampson, Dr Keith


Cockeram, Eric
Hanley, Jeremy


Coombs, Simon
Hannam, John


Cope, John
Hargreaves, Kenneth


Couchman, James
Harris, David


Cranborne, Viscount
Harvey, Robert


Currie, Mrs Edwina
Haselhurst, Alan


Dorrell, Stephen
Hawkins, C. (High Peak)


Douglas-Hamilton, Lord J.
Hawksley, Warren


Durant, Tony
Hayes, J.


Eyre, Sir Reginald
Hayhoe, Rt Hon Barney


Fairbairn, Nicholas
Heathcoat-Amory, David


Favell, Anthony
Heddle, John


Fenner, Mrs Peggy
Henderson, Barry


Fletcher, Alexander
Hickmet, Richard


Fookes, Miss Janet
Hill, James


Forth, Eric
Hind, Kenneth


Fox, Marcus
Hogg, Hon Douglas (Gr'th'm)


Franks, Cecil
Holland, Sir Philip (Gedling)


Fraser, Peter (Angus East)
Holt, Richard


Freeman, Roger
Hordern, Sir Peter


Fry, Peter
Howarth, Alan (Stratf'd-on-A)


Galley, Roy
Howell, Rt Hon D. (G'ldford)


Gardiner, George (Reigate)
Howell, Ralph (Norfolk, N)





Hubbard-Miles, Peter
Rhodes James, Robert


Jessel, Toby
Rhys Williams, Sir Brandon


Jones, Gwilym (Cardiff N)
Ridley, Rt Hon Nicholas


Jones, Robert (Herts W)
Roberts, Wyn (Conwy)


Jopling, Rt Hon Michael
Robinson, Mark (N'port W)


Joseph, Rt Hon Sir Keith
Roe, Mrs Marion


Kellett-Bowman, Mrs Elaine
Rossi, Sir Hugh


Key, Robert
Rowe, Andrew


King, Roger (B'ham N'field)
Rumbold, Mrs Angela


Knight, Greg (Derby N)
Ryder, Richard


Knight, Dame Jill (Edgbaston)
Sackville, Hon Thomas


Knowles, Michael
Shaw, Giles (Pudsey)


Lamont, Norman
Shaw, Sir Michael (Scarb')


Lang, Ian
Shelton, William (Streatham)


Latham, Michael
Shepherd, Colin (Hereford)


Lee, John (Pendle)
Shepherd, Richard (Aldridge)


Leigh, Edward (Gainsbor'gh)
Shersby, Michael


Lennox-Boyd, Hon Mark
Silvester, Fred


Lester, Jim
Sims, Roger


Lewis, Sir Kenneth (Stamf'd)
Skeet, Sir Trevor


Lilley, Peter
Soames, Hon Nicholas


Lloyd, Peter (Fareham)
Spencer, Derek


Lord, Michael
Spicer, Jim (Dorset W)


Luce, Rt Hon Richard
Spicer, Michael (S Worcs)


McCrindle, Robert
Stanbrook, Ivor


McCurley, Mrs Anna
Stanley, Rt Hon John


MacKay, Andrew (Berkshire)
Steen, Anthony


MacKay, John (Argyll &amp; Bute)
Stern, Michael


McNair-Wilson, M. (N'bury)
Stevens, Lewis (Nuneaton)


McNair-Wilson, P. (New F'st)
Stewart, Allan (Eastwood)


Madel, David
Stewart, Andrew (Sherwood)


Major, John
Stewart, Ian (Hertf'dshire N)


Malins, Humfrey
Stokes, John


Marlow, Antony
Sumberg, David


Mather, Carol
Taylor, John (Solihull)


Maude, Hon Francis
Taylor, Teddy (S'end E)


Mawhinney, Dr Brian
Terlezki, Stefan


Mayhew, Sir Patrick
Thompson, Donald (Calder V)


Merchant, Piers
Thompson, Patrick (N'ich N)


Meyer, Sir Anthony
Thornton, Malcolm


Miller, Hal (B'grove)
Thurnham, Peter


Mills, Iain (Meriden)
Townend, John (Bridlington)


Moate, Roger
Townsend, Cyril D. (B'heath)


Monro, Sir Hector
Trippier, David


Montgomery, Sir Fergus
Twinn, Dr Ian


Moore, Rt Hon John
van Straubenzee, Sir W.


Morrison, Hon C. (Devizes)
Viggers, Peter


Morrison, Hon P. (Chester)
Waddington, David


Mudd, David
Walden, George


Neale, Gerrard
Walker, Bill (T'side N)


Nelson, Anthony
Wall, Sir Patrick


Newton, Tony
Waller, Gary


Nicholls, Patrick
Ward, John


Onslow, Cranley
Wardle, C. (Bexhill)


Oppenheim, Phillip
Warren, Kenneth


Oppenheim, Rt Hon Mrs S.
Watts, John


Ottaway, Richard
Wells, Bowen (Hertford)


Page, Richard (Herts SW)
Wells, Sir John (Maidstone)


Parkinson, Rt Hon Cecil
Wheeler, John


Parris, Matthew
Whitfield, John


Patten, Christopher (Bath)
Whitney, Raymond


Pawsey, James
Wilkinson, John


Peacock, Mrs Elizabeth
Winterton, Nicholas


Pollock, Alexander
Wolfson, Mark


Porter, Barry
Wood, Timothy


Powell, William (Corby)
Woodcock, Michael


Powley, John
Yeo, Tim


Prentice, Rt Hon Reg



Price, Sir David
Tellers for the Noes:


Proctor, K. Harvey
Mr. Michael Neubert and


Rathbone, Tim
Mr. Gerald Malone.

Question accordingly negatived.

BUSINESS OF' THE HOUSE

Ordered,
That, at this day's sitting, the Dockyard Services Bill may be proceeded with, though opposed, until any hour.—[Mr. Durant.]

New Clause 4

REDUNDANCY FUND: PAYMENTS FOR DOCKYARD WORKERS

'In pursuance of the arrangements made hereunder the Secretary of State shall out of money provided by Parliament set up a redundancy fund for the benefit of all qualified dockyard employees declared redundant after the transfer of the dockyard undertaking and payments made out of such fund shall be no less in amount and value then payments that otherwise would have been made under the Superannuation Act 1972.'.—[Mr. Denzil Davies.]

Brought up, and read the First time.

Question put, That the clause be read a Second time:—

The House divided: Ayes 179, Noes 214.

Division No. 123]
[10.01 pm


AYES


Adams, Allen (Paisley N)
Faulds, Andrew


Archer, Rt Hon Peter
Field, Frank (Birkenhead)


Ashdown, Paddy
Fields, T. (L'pool Broad Gn)


Ashley, Rt Hon Jack
Fisher, Mark


Atkinson, N. (Tottenham)
Flannery, Martin


Bagier, Gordon A. T.
Foot, Rt Hon Michael


Barnett, Guy
Forrester, John


Beckett, Mrs Margaret
Foster, Derek


Beith, A. J.
Foulkes, George


Bell, Stuart
Fraser, J. (Norwood)


Benn, Rt Hon Tony
Freeson, Rt Hon Reginald


Bennett, A. (Dent'n &amp; Red'sh)
George, Bruce


Bermingham, Gerald
Gilbert, Rt Hon Dr John


Bidwell, Sydney
Godman, Dr Norman


Blair, Anthony
Golding, John


Boothroyd, Miss Betty
Gould, Bryan


Boyes, Roland
Gourlay, Harry


Bray, Dr Jeremy
Hamilton, James (M'well N)


Brown, Gordon (D'f'mline E)
Hamilton, W. W. (Fife Central)


Brown, Hugh D. (Provan)
Hancock, Michael


Brown, N. (N'c'tle-u-Tyne E)
Harman, Ms Harriet


Brown, R. (N'c'tle-u-Tyne N)
Hart, Rt Hon Dame Judith


Brown, Ron (E'burgh, Leith)
Haynes, Frank


Bruce, Malcolm
Healey, Rt Hon Denis


Buchan, Norman
Hogg, N. (C'nauld &amp; Kilsyth)


Caborn, Richard
Home Robertson, John


Callaghan, Jim (Heyw'd &amp; M)
Howell, Rt Hon D. (S'heath)


Campbell, Ian
Howells, Geraint


Campbell-Savours, Dale
Hoyle, Douglas


Carlile, Alexander (Montg'y)
Hughes, Robert (Aberdeen N)


Cartwright, John
Hughes, Roy (Newport East)


Clark, Dr David (S Shields)
Hughes, Sean (Knowsley S)


Clarke, Thomas
John, Brynmor


Clay, Robert
Kaufman, Rt Hon Gerald


Clelland, David Gordon
Kennedy, Charles


Clwyd, Mrs Ann
Kilroy-Silk, Robert


Cocks, Rt Hon M. (Bristol S)
Kirkwood, Archy


Cohen, Harry
Lambie, David


Cook, Frank (Stockton North)
Lamond, James


Corbett, Robin
Leighton, Ronald


Corbyn, Jeremy
Lewis, Terence (Worsley)


Craigen, J. M.
Litherland, Robert


Crowther, Stan
Livsey, Richard


Cunliffe, Lawrence
Lloyd, Tony (Stretford)


Dalyell, Tam
McCartney, Hugh


Davies, Rt Hon Denzil (L'lli)
McKay, Allen (Penistone)


Davies, Ronald (Caerphilly)
McKelvey, William


Davis, Terry (B'ham, H'ge H'l)
McNamara, Kevin


Deakins, Eric
McTaggart, Robert


Dewar, Donald
Madden, Max


Dixon, Donald
Marek, Dr John


Dormand, Jack
Marshall, David (Shettleston)


Dubs, Alfred
Martin, Michael


Duffy, A. E. P.
Mason, Rt Hon Roy


Eadie, Alex
Maxton, John


Eastham, Ken
Maynard, Miss Joan


Edwards, Bob (W'h'mpt'n SE)
Meacher, Michael


Evans, John (St. Helens N)
Meadowcroft, Michael


Ewing, Harry
Michie, William


Fatchett, Derek
Mikardo, Ian





Millan, Rt Hon Bruce
Short, Ms Clare (Ladywood)


Miller, Dr M. S. (E Kilbride)
Short, Mrs R.(W'hampt'n NE)


Mitchell, Austin (G't Grimsby)
Silkin, Rt Hon J.


Moore, Rt Hon John
Skinner, Dennis


Morris, Rt Hon A. (W'shawe)
Smith, C.(Isl'ton S &amp; F'bury)


Nellist, David
Smith, Rt Hon J. (M'ds E)


O'Neill, Martin
Snape, Peter


Owen, Rt Hon Dr David
Soley, Clive


Park, George
Steel, Rt Hon David


Parry, Robert
Stott, Roger


Patchett, Terry
Strang, Gavin


Pavitt, Laurie
Thomas, Dafydd (Merioneth)


Pendry, Tom
Thomas, Dr R. (Carmarthen)


Penhaligon, David
Thompson, J. (Wansbeck)


Pike, Peter
Thorne, Stan (Preston)


Powell, Raymond (Ogmore)
Tinn, James


Prescott, John
Torney, Tom


Radice, Giles
Wainwright, R.


Randall, Stuart
Wallace, James


Redmond, Martin
Wardell, Gareth (Gower)


Rees, Rt Hon M. (Leeds S)
Wareing, Robert


Richardson, Ms Jo
Weetch, Ken


Roberts, Allan (Bootle)
White, James


Robertson, George
Wigley, Dafydd


Robinson, G. (Coventry NW)
Wilson, Gordon


Rogers, Allan
Winnick, David


Rooker, J. W.
Young, David (Bolton SE)


Ross, Ernest (Dundee W)



Sedgemore, Brian
Tellers for the Ayes:


Sheerman, Barry
Mr. John McWilliam and


Sheldon, Rt Hon R.
Mr. Dick Douglas.


Shore, Rt Hon Peter





NOES


Ancram, Michael
Griffiths, Peter (Portsm'th N)


Arnold, Tom
Grist, Ian


Ashby, David
Ground, Patrick


Atkins, Robert (South Ribble)
Hamilton, Hon A. (Epsom)


Best, Keith
Hamilton, Neil (Tatton)


Body, Sir Richard
Hampson, Dr Keith


Boscawen, Hon Robert
Hanley, Jeremy


Bowden, Gerald (Dulwich)
Hannam, John


Brinton, Tim
Hargreaves, Kenneth


Buchanan-Smith, Rt Hon A.
Harris, David


Burt, Alistair
Harvey, Robert


Carlisle, John (Luton N)
Haselhurst, Alan


Chope, Christopher
Hawkins, C. (High Peak)


Clark, Sir W. (Croydon S)
Hawksley, Warren


Cockeram, Eric
Hayes, J.


Coombs, Simon
Hayhoe, Rt Hon Barney


Cope, John
Heathcoat-Amory, David


Couchman, James
Heddle, John


Cranborne, Viscount
Henderson, Barry


Currie, Mrs Edwina
Hickmet, Richard


Dorrell, Stephen
Hill, James


Douglas-Hamilton, Lord J.
Hind, Kenneth


Eyre, Sir Reginald
Hogg, Hon Douglas (Gr'th'm)


Fairbairn, Nicholas
Holland, Sir Philip (Gedling)


Favell, Anthony
Hordern, Sir Peter


Fenner, Mrs Peggy
Howarth, Alan (Stratf'd-on-A)


Fletcher, Alexander
Howell, Rt Hon D. (G'Idford)


Fookes, Miss Janet
Howell, Ralph (Norfolk, N)


Forth, Eric
Hubbard-Miles, Peter


Fowler, Rt Hon Norman
Jessel, Toby


Fox, Marcus
Jones, Gwilym (Cardiff N)


Franks, Cecil
Jones, Robert (Herts W)


Fraser, Peter (Angus East)
Jopling, Rt Hon Michael


Freeman, Roger
Joseph, Rt Hon Sir Keith


Fry, Peter
Kellett-Bowman, Mrs Elaine


Galley, Roy
King, Roger (B'ham N'field)


Gardiner, George (Reigate)
Knight, Greg (Derby N)


Gardner, Sir Edward (Fylde)
Knight, Dame Jill (Edgbaston)


Garel-Jones, Tristan
Knowles, Michael


Goodlad, Alastair
Lamont, Norman


Gorst, John
Lang, Ian


Gow, Ian
Latham, Michael


Gower, Sir Raymond
Lee, John (Pendle)


Grant, Sir Anthony
Leigh, Edward (Gainsbor'gh)


Gregory, Conal
Lennox-Boyd, Hon Mark


Griffiths, Sir Eldon
Lester, Jim






Lewis, Sir Kenneth (Stamf'd)
Sackville, Hon Thomas


Lilley, Peter
St. John-Stevas, Rt Hon N.


Lloyd, Peter (Fareham)
Shaw, Giles (Pudsey)


Lord, Michael
Shaw, Sir Michael (Scarb')


Luce, Rt Hon Richard
Shelton, William (Streatham)


McCrindle, Robert
Shepherd, Colin (Hereford)


McCurley, Mrs Anna
Shepherd, Richard (Aldridge)


MacKay, Andrew (Berkshire)
Shersby, Michael


MacKay, John (Argyll &amp; Bute)
Silvester, Fred


McNair-Wilson, M. (N'bury)
Sims, Roger


McNair-Wilson, P. (New F'st)
Skeet, Sir Trevor


Madel, David
Soames, Hon Nicholas


Major, John
Spencer, Derek


Malins, Humfrey
Spicer, Jim (Dorset W)


Marlow, Antony
Spicer, Michael (S Worcs)


Mather, Carol
Squire, Robin


Mawhinney, Dr Brian
Stanbrook, Ivor


Mayhew, Sir Patrick
Stanley, Rt Hon John


Merchant, Piers
Steen, Anthony


Meyer, Sir Anthony
Stern, Michael


Miller, Hal (B'grove)
Stevens, Lewis (Nuneaton)


Mills, Iain (Meriden)
Stewart, Allan (Eastwood)


Moate, Roger
Stewart, Andrew (Sherwood)


Monro, Sir Hector
Stewart, Ian (Hertf'dshire N)


Montgomery, Sir Fergus
Stokes, John


Moore, Rt Hon John
Sumberg, David


Morrison, Hon C. (Devizes)
Taylor, John (Solihull)


Morrison, Hon P. (Chester)
Taylor, Teddy (S'end E)


Mudd, David
Terlezki, Stefan


Neale, Gerrard
Thompson, Donald (Calder V)


Nelson, Anthony
Thompson, Patrick (N'ich N)


Neubert, Michael
Thornton, Malcolm


Newton, Tony
Thurnham, Peter


Nicholls, Patrick
Townend, John (Bridlington)


Onslow, Cranley
Townsend, Cyril D. (B'heath)


Oppenheim, Phillip
Trippier, David


Oppenheim, Rt Hon Mrs S.
Twinn, Dr Ian


Ottaway, Richard
van Straubenzee, Sir W.


Page, Richard (Herts SW)
Viggers, Peter


Parkinson, Rt Hon Cecil
Waddington, David


Parris, Matthew
Walden, George


Patten, Christopher (Bath)
Walker, Bill (T'side N)


Pawsey, James
Wall, Sir Patrick


Peacock, Mrs Elizabeth
Waller, Gary


Pollock, Alexander
Ward, John


Porter, Barry
Wardle, C. (Bexhill)


Powell, William (Corby)
Warren, Kenneth


Powley, John
Watts, John


Prentice, Rt Hon Reg
Wells, Bowen (Hertford)


Price, Sir David
Wells, Sir John (Maidstone)


Proctor, K. Harvey
Wheeler, John


Rathbone, Tim
Whitfield, John


Renton, Tim
Whitney, Raymond


Rhodes James, Robert
Wilkinson, John


Rhys Williams, Sir Brandon
Winterton, Nicholas


Ridley, Rt Hon Nicholas
Wolfson, Mark


Roberts, Wyn (Conwy)
Wood, Timothy


Robinson, Mark (N'port W)
Woodcock, Michael


Roe, Mrs Marion
Yeo, Tim


Rossi, Sir Hugh



Rowe, Andrew
Tellers for the Noes:


Rumbold, Mrs Angela
Mr. Gerald Malone and


Ryder, Richard
Mr. Francis Maude.

Question accordingly negatived.

Clause 1

TRANSFER OF PERSONS ENGAGED IN DOCKYARD SERVICES TRANSFERRED TO PRIVATE SECTOR

Mr. Lee: I beg to move amendment No. 2, in page 2, line 8, leave out
'the whole or any part of'.

Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to discuss Government amendments Nos. 3, 4 and 10.

Mr. Lee: The first three amendments have been tabled by the Government following the debates in Committee on clause 1(2)(b) and remove any doubt that the dockyards might be split into different parts. Amendments Nos. 2 and 4 make it clear that only one company will be set up by my right hon. Friend the Secretary of State for Defence for each dockyard. Amendment No. 3 does no more than tidy up the clause to remove any doubt which might otherwise have been caused over the transfer of dockyard employees. Amendment No. 10 brings clause 1(8) into line with clause 1(4), thus meeting the concerns expressed in Committee by the right hon. Member for Llanelli (Mr. Davies).
As the House knows, the vast majority of those employed in the dockyards will transfer to the dockyard company, but not all will so transfer. Therefore, I invite the House to agree to amendments Nos. 2, 3, 4 and 10.

Mr. Denzil Davies: As the Under-Secretary of State has said, these amendments reflect the debates in Committee. We are grateful to him for responding to the points that we made. We have no objection to any of the amendments.

Amendment agreed to.

Amendments made: No. 3 in page 2, line 9, after `undertaking', insert
`(disregarding their services for this purpose)'.

No. 4, in page 2, line 10, leave out 'any of the'.—[Mr. Lee.]

Mr. Lamont: I beg to move amendment No. 5, in page 2, line 22, leave out 'transfer of the'.

Mr. Deputy Speaker: With this it will be convenient to take the following: Government amendments Nos. 6, 7 and 9.
Amendment No. 8, in page 2, line 24, after second 'a', insert 'commercial'.

Mr. Lamont: All these amendments are concerned with TUPE, which we discussed earlier and on various aspects of which we had a debate in Standing Committee.
The right hon. Member for Llanelli (Mr. Davies) said that TUPE had good parts and was probably a beneficial addition to our law relating to the transfer of undertakings. The right hon. Gentleman conceded that the regulations protect many rights which perhaps were not protected before. The purpose of one of his amendments was to ensure that TUPE applies not just to the present transfer but to a transfer to any future management. The Government and the Opposition are as one in wanting to ensure that TUPE applies.
In Committee the right hon. Gentleman said that he was broadly satisfied with what we proposed, with one exception, which was that in his view, unless the Bill made it clear that the dockyard undertaking was to be treated as a commercial business, TUF'E could not be guaranteed to apply. I undertook to consider further whether an amendment along the lines that he was suggesting was necessary. I have since written to the right hon. Gentleman confirming that in my view such an amendment is not required to ensure, as we both want, that there is no doubt that TUPE applies in this case. The legal advice that I have been given—we have gone into this matter in some detail — is that the dockyard undertaking at each dockyard is an undertaking within the 1981 regulations.
The right hon. Gentleman knows that I was satisfied that the Bill was therefore sound in this respect. None the less, further consideration has been given by the draftsmen


to the wording of clause 1(4). I hope that the right hon. Gentleman will accept that amendments 5 to 9 are directed towards the result that we all want. Clause 1(4) remains directed towards the application of TUPE to the transfer of the employees alone.
As we have said before, there was a legal doubt, although not the legal doubt which the right hon. Gentleman raised. I give this explanation because I think that the right hon. Gentleman and his hon. Friends might otherwise think that I am introducing this amendment because of the point which the right hon. Gentleman made. It is, in fact, a different point, despite the wording of the amendment. There was a legal doubt whether the transfer of the employees alone, without more, would be an undertaking within the meaning of TUPE. With the amendments which we are debating now, the subsection removes any doubt, by providing that the services of the employees, without more, shall be treated as part of the undertaking capable of being transferred as a business. As a result, I think it is beyond doubt that TUPE will apply to the transfer of the services to a company formed by my right hon. Friend.
Clause 1(4) in the Bill as printed was sound, but the approach which I have just described avoids any argument and I hope that the House will agree that it makes clear beyond any doubt the application of TUPE. For this reason, I hope that hon. Gentlemen will not press their amendment but will support what we have proposed.

Mr. Denzil Davies: The Minister of State has explained why these amendments have been brought forward. We shall certainly not claim any false victory and I accept entirely that it is through his hard work and that of his officials that these amendments have been brought forward. TUPE does not seem to be too easy for anybody, as far as I can see.
With regard to the points we raised in Committee about the commercial operation of the dockyards, I am grateful to the hon. Gentleman for his letter. His lawyers have managed to find a case, although I do not think it is as good as the case that I found, and I accept that the dockyards, although they are not a commercial venture, are perhaps in the nature of a commercial venture. I am sure that there is a lot of room for debate even there, but, since TUPE is a good thing, we want to see it applied. We shall not be pressing the objections which we pressed in the Standing Committee, and we welcome the amendments that have been made.

Amendment agreed to.

Amendments made: No. 6, in page 2, line 23 leave out 'the transfer of.

No. 7, in page 2, line 24 after 'undertaking', insert 'capable of being transferred'.

No. 9, in page 2 line 26 leave out 'any'.

No. 10, in page 3, line 16 after second 'of', insert 'any of'.—[Mr. Norman Lamont.]

Clause 3

EXPENSES OF SECRETARY OF STATE

Mr. Denzil Davies: I beg to move amendment No. 11, in page 3, line 44 leave out 'or operation'.

Mr. Deputy Speaker: With this it will be convenient to take the following amendments: No. 12, in page 4, line 2 after 'dockyard', insert
'or the operation of any such company wholly owned and controlled by the Secretary of State'.
Amendment (a) to amendment No. 12, in line 2, leave out 'and controlled'.

Mr. Davies: The object of the amendment is to make clear, which the Bill does not, the expenses incurred in the formation and operation of any company—the crucial word is "operation".
As the Bill is drafted, the Secretary of State could come to the House and assort money for the operation of any company to run the dockyards. In other words, if A and P Appledore International could not do so, under clause 3 the Secretary of State could get money from taxpayers to do so. That might or might not be a good thing, but I do not believe that it was intended. It would have extraordinary effects. The Under-Secretary of State said that that was not intended, and we have tabled the amendments to put the Government's intention in words.
I see from the Government amendment to our amendment No. 12 that there is not the word "resist". At last the Under-Secretary of State and the Minister have got their way, and have been allowed to accept one of our amendments. The Minister shakes his head, and perhaps that remark was premature, but I think that on this occasion we can claim a small victory.

Mr. Lee: As the right hon. Member for Llanelli (Mr. Davies) said, clause 3(a), among other things, allows my right hon. Friend the Secretary of State to pay out of money voted by Parliament expenses incurred in operating any company formed by my right hon. Friend at either of the dockyards. When that was raised in Committee, I said that that provision in clause 3(a) would allow my right hon. Friend to incur expenses in the event of his operating the dockyards as a Government-owned public limited company.
The right hon. Gentleman said that the clause does not refer specifically to a Government-owned plc. He is quite right; it does not. But if one looks at the rest of the subsection it is, I believe, clear enough what is intended. The clause refers to expenses of my right hon. Friend incurred in connection with the operation of any company formed with a view to the provision of dockyard services at a designated dockyard. What expenses would my right hon. Friend incur, if the company were not being operated by a Government-owned plc?
I accept, however, that amendments on the lines of those suggested by the right hon. Gentleman would make explicit what I believe is already implicit. Therefore, I would not wish to oppose the right hon. Gentleman's amendment to remove the words "or operation" in page 3, line 44. So it is victory. Obviously, however, as the right hon. Gentleman's further amendment implies, if the words "or operation" are to be removed, they would have to be replaced by others to ensure that my right hon. Friend could operate a government-owned plc at each dockyard if he wished.
I hope that we can leave Report stage on a note of agreement. I cannot, however, agree the wording of the right hon. Gentleman's second amendment to this subsection in its present form. If the words
wholly owned by the Secretary of State


are included, no purpose would be served by including the words "controlled by". I have therefore proposed an amendment to the right hon. Gentleman's amendment which is as he has proposed, but without the tautology.
I could not accept the right hon. Gentleman's amendment to leave out the words "or operation" without

a substitute. I would not, however, oppose it, if the amendment I have proposed were acceptable to the right hon. Gentleman and his hon. Friends.

Amendment agreed to.

Amendment made: No. 12, as amended, in page 4, line 2, after 'dockyard', insert
'or the operation of any such company wholly owned by the Secretary of State'.—[Mr. Denzil Davies.]

Mr. Norman Lamont: I beg to move, That the Bill be now read the Third time.
We have had a long line of reports on the past performance of the dockyards, and the shortcomings and problems have been extremely well documented. Nobody could do other than agree, and I think that the right hon. Member for Llanelli (Mr. Davies) accepts this, that change is greatly needed in the dockyards. Right hon. and hon. Members may not agree with the particular method we have chosen, but the case for some change is extremely strong, given the record of the dockyards. We would certainly not have put forward this scheme unless we were strongly convinced that substantial improvements in performance and savings to the Exchequer could be achieved.
During the debate on new clause 1, I attempted to indicate some of the calculations behind the overall calculation that we have made of savings of £21 million in the first 10 years and of a higher amount after the initial costs have been amortised. Ever since I have been connected with this Bill I have always emphasised that these costs are, in a sense, illustrative. They are based on certain assumptions. The efficiency savings assumed could be even greater.
I repeat the point I made when we were discussing new clause 1. Many of the costs that people have been so anxious to analyse and investigate in these debates would have to be incurrred in any genuine attempt to improve the performance of the dockyards. I refer to proposals such as setting up new management accounting systems. It is a terrible comment on the state of the dockyards that it should actually be necessary to go to such lengths to install proper management control and accounting systems. If Opposition Members were genuine in saying that they wanted to improve the efficiency of the dockyards, they would admit that costs such as to cost of having consultants advising on those systems and the cost of hardware and software would have to be incurred.
The hon. Member for Clackmannan (Mr. O'Neill) said that I did say what would be the cost of setting up a trading fund. That question cannot be answered, because the answer depends precisely on what level of efficiency it was assumed a trading fund would achieve. The cost of buying out restrictive practices is the same either under a trading fund or under commercial management, but there is a crucial difference. Under the trading fund there is not a separation of the customer and the supplier. That is really one of the key reasons why we have gone for the introduction of this method of commercial management rather than simply setting up a trading fund whereby, because the customer and supplier are so closely related, it is possible for the supplier merely to price himself into profit.
Part of the debate that we had in Committee and again today has been about the effect on the work force and what would happen in the cases of pensions and entitlements to redundancy benefits and other negotiated benefits. I believe I managed to demonstrate to the House that there is no reason to think that people would be worse off; there is a considerable safety net. One cannot guarantee security for people for ever in any world, and certainly when people have moved into the private sector there are

changes. Naturally, big changes will be brought about, but there will be a core programme. Obviously, we believe that there will be continuing work for the dockyards.
Particularly as regards Rosyth, I am amazed at what Labour Members are prepared to say about the effects of commercial management, when we contemplate even for a moment their proposal to get rid of our independent deterrent, because getting rid of Trident would remove 40 per cent. of the work load at Rosyth. It is absurd for right hon. and hon. Gentlemen to spread scare stories about the cost of redundancy when what they propose in relation to the independent deterrent would leave a gaping hole in the work load at Rosyth. I wish to refer to letters written by the Leader of the Opposition to workers at Devonport and Rosyth. They show the utmost cynicism. The letters were identical except that three sentences in the letter to Devonport workers referred to the need to get rid of Trident and there were no references to Trident in the letter to Rosyth workers. The second paragraph in the Devonport letter states:
You know of the plans to cut the workforce by 400 by next April. Behind that comes the threat to a further 4,000 jobs under the proposals of the 'Levine Report which, fostered by Michael Heseltine, prepares the way for the privatisation of the Royal Dockyard as a 'managing agency'. At the same time, the Government is locked into the Trident programme which will swallow at least £12 billion of defence expenditure and strip the rest of British defence provision.
The Rosyth letter states:
You know of the plans to cut the workforce by 400 next April.
and so on, except that the sentences about Trident are omitted. I shall gladly give way to any Labour Member who will tell me why those sentences are left out. Labour Members always want to intervene during my speeches, but they do not want to do so this time. What possible reason, other than the greatest cyncism, can they have? They know that their proposals will have a devastating effect on Rosyth. The number of jobs at risk under our proposals are as nothing compared with the effect of the Labour party's defence policy.

Mr. Gordon Brown: Nonsense.

Mr. Lamont: It is not. It is the absolute truth, as the hon. Gentleman well knows. I make no apology for mentioning those letters, because they should be on the record. They were cynical letters.
By introducing commercial management into the dockyards we seek to achieve full value for money from the defence budget, a climate of maximum competition, freedom for local management from public sector constraints, enabling them to operate effectively in a competitive environment, better levels of efficiency, a clear separation between the dockyards as suppliers and the Navy as customer, financial and accounting arrangements which reflect normal commercial practice and scope for commercial management to expand employment opportunities in the regions concerned by bidding for some of the commercial work available as well.

Mr. O'Neill: Argentina.

Mr. Lamont: Even the hon. Gentleman might think occasionally that it is a long way to come from Argentina for a ship refit. I do not think that that is likely.

Mr. O'Neill: Touche Ross referred to it.

Mr. Lamont: Touche Ross listed all the navies in the world. If the hon. Gentleman cannot do better than that, he should go away and do a little more studying.
There are good, sound reasons why commercial management must be introduced if we are willing to face up to the problems which Governments have so often identified in the dockyards. The difference is that no one has been prepared to do anything about those problems. That is why we have the Bill. I am confident that it will give better value for money and a better service to the Royal Navy.

Mr. Denzil Davies: The Minister made a knockabout speech, and we understand why. He knows that he has a weak case. It was clear in Committee that his heart was not in the legislation. He had to come back to it, jetlagged from the Khyber pass, or wherever he had been, and was thrown straight into Second Reading. There were many problems in the background when the Bill was in Committee, including the famous Lygo letter and the difficulties at the Department of Trade and Industry, from which the hon. Gentleman had just come. He found it difficult to concentrate in Committee on this little Bill. He had played no part in its preparation—not that that was his fault.
The Minister knows very well that the Bill does not make any sense and that it is part of the frenetic ideology of the former Secretary of State for Defence, the right hon. Member for Henley (Mr. Heseltine). Were it not for the right hon. Member for Henley, I do not think that we would have had this Bill tonight.
The Bill was ill-thought-out and ill-considered. None of the options were considered, and certainly none were costed. This scheme was not costed, and that was clear from our debates in Committee.
The Minister discussed unemployment in Scotland, but under his Government unemployment in Scotland has trebled. Given the Government's record, I do not think that the Minister should say anything about unemployment in Scotland.
The Bill is neither one thing nor the other. It is not privatisation, and it is not public sector. It is an extremely hybrid scheme and it has no basis. I do not think that any other country, including the United States of America, operates, or would operate, its dockyards in the way that the Government propose for Rosyth and Devonport.
The Minister spoke of the great difficulty of introducing other schemes, but there would be no difficulty in doing so. It is possible to run the dockyards under a trading fund. The royal ordnance factories were run very successfully under such a fund. The Minister was extremely insulting when he kept on referring to the ordnance factories as pricing themselves into profit. That was not the case. The ordnance factories operated commercially and profitably. The problems have arisen after privatisation. The ordnance factories are now being run down and are facing redundancies. Their future is insecure. I do not wish to spread alarm, but, frankly, if this proposal goes through I can see the same thing happening to the dockyards.
The ordnance factories operated well under a trading fund. We hear that we had to buy all those computers and all that hardware and software. I counted the number of times that the Minister mentioned hardware and software.

He talked about enough hardware and software to sink an aircraft carrier. Apparently all the costs would go on hardware and software—how ridiculous.
The Minister has still not answered the question about costs. He said that according to the Government's figures—pretty ropy figures—£21 million a year over 10 years would accrue to the Exchequer. I asked what the deficit would be to the budget of the Ministry of Defence, but he was afraid, properly from his point of view, to answer.
The deficit, a coincidental figure, will be £21 million a year. The Minister knows that, because it is in the documents. That deficit has gone up since the original calculations in June 1985. The deficit will be £21 million, and multiplied by 10 that is over £200 million deficit to the Ministry of Defence's budget. The Minister knows that, and he should have answered the question.
That deficit comes partly from having to pay £11 million a year for this new organisation. Another 800 new staff will be taken on—that is what the efficiency is about. The staffing level will rise by 800. Other functions and other co-ordinations will have to be carried out. Secretaries will have to be employed, and they in turn will require secretaries. We know what will happen—the bureaucracy will increase. A further 800 new staff are to be employed while 2,500 dockyard workers at Rosyth and Devonport are apparently to be sacked. Is that the sort of efficiency that we can expect from this commercial management?
The Ministry of Defence will also have to pay the pensions, which means another £9 million a year. Altogether, it adds up to £20 million a year out of the Ministry's budget. On top of that, if there are redundancies the cost will be charged to the Ministry. When we discussed new clause 3, the Minister admitted that the only way to replicate the redundancy payments under the Civil Service pension scheme if the contractor did not have the money to make the payments would be to put the cost of such payments on the price of the article and the customer would pay, as the customer always does.
That again will come out of the Ministry of Defence's budget, so the figure of £200 million that I mentioned earlier is a conservative estimate. The Minister of State shakes his head. All he can say is that the Treasury will somehow or other look at the matter, think about it and take it into account. I am sure that he does not believe that the Treasury will hand over £200 million to the Ministry of Defence to pay for the scheme. The money will come from the Ministry of Defence's budget, and the Minister knows that well.
The Bill may be given its Third Reading, although the Government's majority has been going down and down. Perhaps we should have put down a few more amendments. Last time they had a majority of 34 or 35. I can understand why the Minister of State galloped through his speech. He is having difficulty keeping his troops here. The Minister of State, Department of Trade and Industry, has apparently gone abroad rather than vote for this legislation. Nobody believes that the Bill will improve efficiency in the dockyards or that costs will be saved. As I said earlier, the Royal Navy will receive an inferior service, and it will do so at a higher cost. That will be the effect of what the Government are doing.
Even if the Bill receives its Third Reading this evening, may I suggest, gently and kindly, to the Minister that he should put the Bill to one side, forget about it and leave it where it should have been left before the right hon.


Member for Henley tried to introduce it. It will be damaging to the Government, to the dockyard workers and to Britain's defence.

Mr. Deputy Speaker: Miss Janet Fookes.

Hon. Members: Oh!

Miss Janet Fookes: I hear noises from Labour Members, but I hope that I am entitled to speak, particularly on Third Reading.
I want to put two points to my hon. Friend the Under-Secretary. First, I want from him assurances about the terms and conditions of the employees. I am well aware that that has been discussed at length in Committee, but it is appropriate that on Third Reading the assurance should be given that, so far as possible, the terms and conditions for employees should be no less good than before. Indeed, I am rather more optimistic than Labour Members because I hope that in the fullness of time they will be better. We should now look on this as an opportunity for things to be made better rather than simply assuming, as Labour Members seem to assume, that they will be made worse. It is obviously of importance to individual employees that they have those assurances. I know that many rumours have abounded in the city quite understandably in the period of uncertainty and transition, and it would be helpful to have that assurance tonight.
Looking now at the rather broader issue of commercial management, my hon. Friends on the Front Bench will know my reservations about that. When the management put in its bid I was greatly encouraged because I genuinely believe that that represents the best way forward and the other assurance that I would like from my hon. Friends tonight is that they will be looking at the management's bid seriously. Clearly, I do not expect it to be successful regardless of the management's capacity to perform. It must operate in fair competition with any other company. I believe that only one consortium is in competition. But it is of the greatest importance to me that that assurance should be given. I have the highest regard for the management at the dockyard, particularly for the managing director. If anyone can make a success of this for the employees, the dockyard and the city it is Mr. David Johnston. I have backed his bid strongly right from the beginning—from the time when I first knew about it. However, I do not want window-dressing. I need to know that the Government are serious about the hid. I believe that if the management team can win the competition for the commercial management it will be a very good thing for the city and the employees —especially as I understand that the management would wish to buy locally many of the supplies that now have to come from other parts of the country. That would be very good for the economy of the city.
I hope, too, that the new company will be able to find opportunities to take on other work not related to the Royal Navy. I recall that that was one of the original objectives of the major change that is to be made. I hope very much that it will come to fruition, because it must be for the good of the dockyard and the city if other work can be found apart from the immediate Royal Navy work. The amount of that work has always fluctuated. I remember a newspaper report some 20 years ago making dire

predictions of a downturn in the amount of work provided by the Royal Navy for the dockyard. If those fluctuations can be evened out by other work not related to the Royal Navy, that will be to the good of the dockyard.

Mr. Douglas: Such as?

Miss Fookes: I do not pretend to be an expert on what might be done in that dockyard. I believe that there is an enormous residue of skilled labour there because generations of Plymouthians have gone into the dockyard. I do not believe that it is beyond the wit of man—or, specifically, of Mr. Johnston — to find other opportunities for all the skills there. I would not pretend to teach Mr. Johnston his business, but I believe that those opportunities exist.
I conclude with those two points, and ask for those assurances.

Dr. Owen: Listening to the hon. Member for Plymouth, Drake (Miss Fookes), I am reminded of T. S. Eliot's line:
Not with a bang but a whimper 
There was a moment when the hon. Lady joined us in opposing the Bill on a cross-party basis. If this is the end of her opposition, she would have done much better never to start it. Whatever one's view on the hon. Member for Plymouth, Sutton (Mr. Clark) and whether or not he should resign from the Government, at least his views on the Bill are so perfectly clear that he has sought neither to be here nor to vote on it. With such support, I certainly think that the city of Plymouth has a right to draw some attention to what has been happening.
I must say that I am angry tonight. This is a bad Bill. It is very bad for the city of Plymouth. It is a poor way of repaying years of loyalty to successive Governments by the people who work in the dockyard. Furthermore, it is my fear and belief that the service to the Royal Navy will be damaged, and that thereby the Navy will be damaged too.
I have no doubt, too, from our earlier discussions on the costs, that all this will be achieved at a heavy price. It is time that hon. Gentlemen on the Government Benches, and the hon. Lady, realised that the defence budget is now being cut by 7 per cent. in real terms over the next three years. The additional extra cost which no one has denied will fall on the dockyard over the next few years will damage the defence of this country.
There is little to be gained by going over old arguments. The Government have got what they wanted, on paper. They will get the Bill. They have been able to take out of the Government service a very large number of people. On paper, the Civil Service will be much reduced. That the Government have achieved. In the process, they have also declared substantial redundancies. Most of the redundancies have been voluntary, and I am pleased about that, but 2,000 jobs have been lost in Plymouth and in my view more will be lost over the next decade. I believe that eventually the dockyard will employ about 7,000 people.
I face the fact that the Government have the power, but I ask them not to use it. There is no doubt that there is a massive body of opinion, much of it in the Tory party, a substantial number of industrialists and an increasing number of people in the Navy who are waking up to what is really happening to them. They say to the Government "Create Devonport plc, but do not fragment the


dockyard". It is nonsensical to cut into the dockyard in the way that has been done, separating the management from the control of the assets. We have heard today and seen in the report what substantial assets there are. If anything can be salvaged out of this mess let it be a rolls royce solution in that the Government have a commercial company. The employees are no longer civil servants, but at least let them all be employed and operate one single industrial enterprise which would be Devonport dockyard and Rosyth dockyard. It is not what we wanted and it is not ideal but if the Secretary of State were to go to the unions and say that he would be prepared to not implement the Bill he would find that there would be a response and, even at this late stage, I hope that the Secretary of State will look at that.
On the matter of employment prospects at Rosyth, I want to make it clear that although we have opposed this Bill with the Labour party we do not hold its view on what should happen to Polaris. We would not decommission Polaris. It would continue for its natural life. Even though we would cancel Trident, I believe that it would be possible, by expanding the SSN build rate, to pick up the slack and retain a substantial dockyard and submarine refitting at Rosyth. I do not believe that the cancellation of Trident, provided it was with the continuation of Polaris to the end of its natural life—which is certainly until 1997 — need harm Rosyth dockyard. It also need not harm employment at Vickers because we would be increasing the submarine build rate to take up a good deal of the slack.
That having been said, the substantive issue is the Bill. The Bill deserves to be rejected. My hon. Friend the Member for Portsmouth, South (Mr. Hancock), who was on the Committee for the Social Democratic party and the alliance, and I will vote against this as will many of my right hon. and hon. Friends. We shall do so because we think that it is a damaging Bill. It is bad for the Navy and bad for employment. It is a relic of the right hon. Member for Henley (Mr. Heseltine) that should be dispatched to the wastepaper basket. If the present Secretary of State had any sense he would have nothing to do with the Bill.

Mr. Henry Bellingham: I am aware of the fact that I do not have any expert knowledge on this matter and I do not have a constituency interest. However, I was on the Standing Committee along with other right hon. and hon. Members. The right hon. Member for Plymouth, Devonport (Dr. Owen) mentioned that his hon. Friend the Member for Portsmouth, South (Mr. Hancock) was on the Committee. He came and went; as I remember, he did a runner and did not come back, or at least I cannot remember his coming back. However, I understand that he then issued press releases, took on the Government single-handed and did a great deal of good in getting them to change their mind. However, I do recall the hon. Gentleman doing a runner.
One of the characteristics of the Committee was the number of contributions from different hon. Members. It was a good-natured Committee. The Bill has met widespread opposition from many quarters, but it is easy to forget the background. Many local industry groups, local Members of Parliament, trade unions, the City and local authorities agree that change is vital for the long-term future of the dockyards.
The past 15 years have seen many reports, reviews and studies on the performance of the dockyards and many of them make extremely grim reading. Until now, no Government have dared to grip the situation. In 1978 there was a report and the then Labour Government had the opportunity to introduce a trading fund but they ran away from that. They had an ideal opportunity, but nothing was done. I do not feel that doing nothing in this case was a viable option. That is why I congratulate the Government on having the courage to make a brave attempt to tackle head on a situation that was becoming extremely serious.
I have a number of reservations on that matter, as have other Conservative Members, and my preference was for a trading fund. However, I am a realist and it would be churlish of me not to support the Government tonight, as they are making an attempt to do something positive and constructive.
I hope that the Minister will clarify two points which are causing me concern. The first relates to costs. The right hon. Member for Llanelli (Mr. Davies) raised three points which relate to additional costs which will arise as a result of the Bill, but other costs were mentioned in a series of press articles towards the end of last week and I should be grateful if the Minister would comment on them.
The first point relates to the estimated £30 million consultancy fees and to an unquantified cost in Ministry of Defence staff time. There is also the sum of £46 million to ensure the continuation of a supply service to the Ministry of Defence and the matter of VAT which will now have to be paid on dockyard contracts. Another point which the right hon. Member might have mentioned was the fact that the dockyards will be supplied by the Ministry of Defence with a management financial ledger—an accounting package for the use of contractors—and that will lead to an additional cost.
It is surprising that detailed figures have not been given. There is an urgent need for those additional figures and I urge the Minister, if he cannot give them tonight, to provide them in the very near future.
The final point which concerns me is that the Comptroller and Auditor General will no longer have access to the books of the dockyard operators. Therefore, there will not be, as I understand it—I may be wrong and I hope that the Minister can clarify this for me—any accountability to Parliament once the Bill reaches the Statute Book.
I am worried about those points, but I congratulate the Government on tackling this matter, on biting the bullet and on coming forward with a positive and constructive Bill. I wish the Bill every success and I am pleased that I had the chance of serving on the Standing Committee.

Mr. Gordon Brown: This is a bad Bill, which no amount of amending could have improved. It is very interesting to note that the main argument from the Conservative Back Benchers who have spoken in favour of the Bill tonight is that they have no expertise in the matter of dockyards. They would have done better to adopt the course taken by the hon. Member for Plymouth, Sutton (Mr. Clark), who, knowing that he could not succeed in the amendments that he wanted and that he could not get the guarantees he sought about removing the possibility of foreign control, absented himself from the House and said that, if he had been here, he would have had the guts at least to have voted against the Bill.
There are no guarantees in this very short Bill about apprenticeships, conditions of service or preventing foreign control. We have seen in the documents issued today that the possibility of a foreign state holding in the dockyards is being contemplated. There are no guarantees about security and, in the documents, the Ministry of Defence contemplates that the Ministry of Defence police may pass into private hands within a year of the privatisation exercise. There are no guarantees in the Bill about those matters.
The Ministry of Defence civil servant leading the operation was right to tell the Public Accounts Committee and the Select Committee on Defence that the Bill is the high-risk option for the future of the Navy and for the efficiency of the fleet. When risks are involved in the dependability of the service to the Navy, in the reliability of that service and the capability of the dockyards to respond in times of emergency, the only certainty about the Bill is that it will cost the defence budget more.
Nothing that the Minister has said so far today alters the Opposition's view that, in the first years, in the first decade and indeed until the end of this century, the Bill will cost the taxpayer more. At the same time jobs will be lost both at Devonport and at Rosyth. It ill befits the Minister of State to talk about Labour's policies when his Government have been responsible for closing Chatham, for the reorganisation of Portsmouth and in the last year for a cut of 2,000 jobs at Devonport and 400 jobs at Rosyth.
That is not the end of the matter. In the documents which we should have had days ago but which have only been made available to us today, it is made clear to the contractor that the Government expect substantial job cuts at both Rosyth and Devonport as a result of privatisation. Indeed, the contractors are asked
to list the scope for cost effective subcontracting and how this could affect the size of the work force and facilities.
They are also asked
to state their intentions for taking work out of the dockyard
not bringing work in—
for completion in other parts of their organisation or through subcontracting".

Mr. Norman Lamont: The hon. Gentleman made that point in Committee and alleged that we never answered it. It is true that contractors were asked whether they would take work out. I am sure the hon. Gentleman will agree with me that it is a good thing that we should know whether they intend to do that. He will know too that the document also asked whether they would bring work in. If the hon. Gentleman quotes one, he should quote the other. We want to know what will happen. The hon. Gentleman is totally misrepresenting the position, not for the first time.

Mr. Brown: The Minister is right to say that the document asks what work will be taken out and what work will be brought in. Of course, the assumption behind the whole manoeuvre and behind the costings, which have not been properly brought to the House, is that jobs will be lost as a result of the scheme. [Interruption.] I shall give one illustration of that in the document that was issued today.
It says that contractors
should also indicate how they would minimise the impact on the local community of any future reductions in the dockyard work force.

If that is not the Ministry of Defence expecting job reductions as a result of the scheme, I do not know what evidence the hon. Member for Plymouth, Drake (Miss Fookes) needs.
It is all confirmed in the report to the Public Accounts Committee by the Ministry of Defence last summer, when the Ministry of Defence specifically asked that the figures that it had given about the possibile redundancies resulting from the privatisation scheme should be kept secret by being marked "confidential" and therefore denied to hon. Members and to the public.
The Bill's proposals have found no favour with any organisation or committee that has examined the future of the dockyards since the war. They have been rejected as options by them all. The proposals have been resisted unanimously by every section of the work force in Devonport and Rosyth; they have caused anger among the work force, because this is a change not by consent but by the unilateral imposition of the Minister's own ideas.
The proposals threaten jobs, risk the efficiency of the Navy, risk the dependability of the service to the Navy and involve additional costs. Indeed, now that we have debated them for 70 hours in Committee and for five or six hours today, it is obvious that the proposals are just privatisation for the sake of privatisation. No shares will be issued, so there is no mass capitalism. No savings will come to the public sector borrowing requirement, because the Government will still have to fund all new investment. The Minister has satisfied neither us nor any of the Committees of the House that have examined the matter that savings will come on day-to-day costs. The Minister would do better to drop the proposals by refusing to implement the Bill if it ever gets through both Houses.

Mr. Hancock: We have had a long debate today and we spent many hours on the Bill in Committee. The hon. Member for Norfolk, North-West (Mr. Bellingham) made an intervention to criticise my performance in Committee. That was a bit rich, when his only two contributions in Committee were, first, to inquire whether or not we should leave the room when the fire alarm went off, and secondly, to congratulate the Minister of State on his considerable leadership and charisma on the issue. Having missed the Report stage, he should not have come in on Third Reading to try to score a cheap point.
We have today explained as best we can that the only winners tonight will be the Government, but that there will be many losers in the future because of the Bill's effect on the Navy, on dockyard workers and on the country's defence.
You have been in the Chair for a substantial part of the debate, Mr. Deputy Speaker, and I am sure that you cannot have failed to accept the valid arguments that have been raised time and again about the problems that the Bill will create. The sadness that fills my heart arises from the fact that I have seen the dockyard in Portsmouth being run down. In my lifetime, the work force has fallen from 30,000 to about 5,000 now in the Navy base. I have seen what such devastation can do to a city, and I have nothing but fears for Rosyth and Devonport. I am sorry that I do not have the enthusiasm of the hon. Member for Plymouth, Drake (Miss Fookes). I do not see the opportunities, but only the enormous problems that the Bill will create for the nation and those who have worked loyally on our behalf.
Many hon. Members have offered Ministers suggestions about what they should do after the Bill receives a Third Reading. Some have suggested that Ministers should sit on the Bill, others have suggested that it be put in the dustbin. Ministers should take a tip from those who have examined the Bill carefully. They should take the advice that my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) and Labour Members have offered. They should not try to enact the Bill. They should not inflict such damage on people who have been loyal or risk damaging the effective and efficient operation of the Navy. The Bill is a mistake, and although the Government may win tonight, the nation will lose in the long run.

Mr. Douglas: It is interesting to reflect on the country's response to legislation as it passes through Parliament. When, for example, in the Defence Select Committee and in discussions with responsible local authorities in Fife and elsewhere, we first examined the Government's proposals, the Government claimed that this was a good and necessary measure. They told us that everyone agreed that change was necessary.
One would therefore expect that, since the Bill was published, there would have been a great wave of public support and acclaim for this great new measure designed to improve efficiency and to ensure that the Royal Navy got not the service to which it has been used, but an improved one.
After 70 hours in Committee and on Report, we have heard from only two Conservative Back Benchers. That is a measure of the number of friends that the Bill has acquired in the House and the country. With such friends, the Bill does not need enemies, one might argue. The Government have manifestly failed to enthuse dockyard workers, the Navy or the areas concerned. The more the Bill has been explained and exposed, the more support for it, even from Conservative Back Benchers, has diminished.
The hon. Member for Plymouth, Drake (Miss Fookes), in an engaging revelation, told us that she is not an expert. All the experts who have examined this proposal damn it. It is damned by the Navy, by the locality, by the Select Committee on Defence, upon which the Government have a majority, and by the Public Accounts Committee. The only way in which to get approval for this nasty, paltry little measure is to impose a three-line Whip and drive the Government's majority through the Lobby.
This Bill has no friends. The Minister said that this expenditure will be needed anyway. If it is so essential to set up an organisation in Bath to monitor future project management day by day, why not do it now? If this is a device to make the dockyards more efficient, why not do it now without the Bill? What is the difficulty about employing Peat Marwick Mitchell and Co. or Touche Ross and Co. to examine the dockyards' accountancy system without the passage of this stupid, paltry little measure?
The hon. Member for Drake said that she supports the managing director over the management buy-out of the Plymouth dockyard, but she said not a word about the possibility of a conflict of interest. Is there no conflict of interest for serving naval officers and men who are engaged on the refitting and repair of naval vessels in working hand in hand with private enterprise groups with which they will have to consort to achieve the Government's aims in this Bill? Does not that disturb right

hon. and hon. Members on the Government Benches? This is a devilish and stupid little measure that does not provide for efficiency in the fleet. I have sought overwhelmingly to prove that it will be costly both to the Exchequer and to the budget of the Ministry of Defence.
The Minister of State for Defence Procurement referred to the damage which he said Labour party policy would cause to employment in Rosyth. I am willing to go to Rosyth and Dunfermline this weekend and debate the Government's policy for Rosyth compared with the Labour party's policy. I make that open challenge to the Minister. I take the view about patriotism that was expressed the other week by the right hon. and learned Member for Richmond, Yorks (Mr. Brittan). Who are the patriots now? We are witnessing the ending of 500 or 600 years of history. For 500 or 600 years the dockyards have been in the public domain. They have served the navy and the national interest. They have served not just Rosyth, Devonport and Plymouth but the national interest as a whole.
The patriots on the Conservative Benches are putting aside the interests of the nation because of their view about what private enterprise should do. I feel that I speak for the whole of the Labour party when I say that we give notice to contractors that if they spend valuable managerial time going through the proliferation of documents that have been issued today, it will have been wasted. The Labour party believes that the Navy is in the public domain and that therefore the dockyards should also be in the public domain. When Labour is returned to power it will bring back the dockyards into the public domain.

Mr. O'Neill: It is two years since Mr. Levene visited Rosyth. He spent two hours there and produced the recommendations which have borne fruit in this Bill. The only thing upon which hon. Members on both sides of the House agree is that the status quo is not an option. No hon. Member can be happy with the prevailing conditions at Rosyth, but the Opposition object to the manner in which the initial investigations were conducted. We object to the so-called consideration of the options and the farce of the consultation process. We now object to the implementation of the preferred option. We disagree with the assumptions on the costs and benefits. We disagree with the impact of the new contracts on industrial relations We have received no assurances tonight that wages, conditions, redundancy arrangements and pensions will be copper-bottomed or guaranteed by the Government or by the legislation. We expect that the redundancies that will ensue after vesting day will be met with bitterness and industrial strife, which will render all the Government's ambitions to improve the efficiency of the yards as naught.
The Opposition disagree with and disapprove of the arrangement in its entirety. It will be bad for those who work in the yards and for the communities surrounding them. It may be acceptable to the hon. Member for Plymouth, Drake (Miss Fookes) that 2,000 jobs should go in Devonport through voluntary redundancy. What about the lost opportunities for apprentices? That statement shows no consideration of what alternative employment can be found in a community which I understand to be in considerable economic difficulties. We hear nose arguments from Rosyth and from the trade unions. It might have been better had the hon. Lady drifted into the


Standing Committee now and again and heard those arguments being repeated hour after hour as we considered the Bill.

Miss Fookes: The hon. Gentleman's point is less than fair. I did not drift into the Committee because I was chairing another Committee, which I am required to do as a member of Mr. Speaker's panel of Chairmen.

Mr. O'Neill: I am sorry about the hon. Lady's priorities, and I accept the point that she made—[HON. MEMBERS: "Withdraw".] I am sorry that the priorities of the House intervened in this way. I did not mean it in the other sense. But the hon. Lady told the House that she was not expert in the workings of the dockyards and then proceeded to make those points, ignoring the fact that 2,000 jobs were lost to the community—2,000 jobs that could have been taken by people apart from those who were prepared to give them up.

Miss Fookes: When I said that I was not expert, I was referring to one specific point. I was asked whether I could suggest ways in which the dockyard could be used for outside work. I said that, in that respect, I could not offer expert advice but I knew that people such as Mr. Johnston, the managing director, had ideas in that direction and I was prepared to accept his view that this could be done. Others also suggested it.

Mr. O'Neill: All that I can say is that work which is being carried out on Merseyside, Tyneside and on the Clyde will go to other parts of the country because of the reorganisation, and that the misery that exists in some areas will be compounded by the foolhardiness of the Government's proposals.
The Bill is bad for workers and for the prospects of ship repair and ship-fitting for the Navy. It will damage the Navy incalculably and will be bad for Britain's security. The only prospect for change is a change of Government and direction so that Britain can be properly defended by people who are happy and confident in the knowledge that their work will continue.

Mr. Lee: I am pleased that the right hon. Member for Plymouth, Devonport (Dr. Owen) has returned, because even at this late hour I want gently to tease him and ask whether he recalls writing an article in October 1983 in the Economic Affairs magazine entitled
Agenda for Competitiveness with Compassion.
In it he said:
The SDP has not yet developed a strategic view on the role of the commercial public sector. Is it just a staging post between public and private ownership, or can it be the vehicle for the imaginative, practical and enthusiastic development of industrial democracy … Franchising could be a very attractive approach for it provides a way of enabling enterprises to act competitively, but within a framework which protects the public interest in a way which entirely unregulated competition would not.

Dr. Owen: Why does the Minister not go on to mention the passage about the dockyards and why that is not appropriate for the dockyards? It is in the same speech.

Mr. Lee: It is a long speech.

Dr. Owen: I think that it would be appropriate.

Mr. Lee: Certainly, the dockyards were referred to, but those quotes stand. As I said in my opening comments, I was half teasing the right hon. Gentleman. Nevertheless, he flirted with franchising at that time.
I have no intention of repeating all the arguments used on Second Reading, in the 25 Committee sittings or today on Report. As my hon. Friend the Minister said earlier, over the years our naval dockyards have had any number of reports and investigations, and have been calling out for radical change. The Bill will introduce commercial management and, for the first time, a real separation between the Royal Navy as customer and the dockyards as supplier. Financial benefits will come to taxpayers, especially in the long tem. The Navy will benefit from greater efficiency and the speedy return to operational service of its fleet.
I am grateful for the speech of my hon. Friend the Member for Plymouth, Drake (Miss Fookes), who has taken a deep and continuing interest in the progress of the Bill and in the dockyards. I am sorry about some of the remarks made in criticism of her. Regarding terms and conditions, I am happy to give her the assurance for which she asks. TUPE will apply, and was covered extensively in the earlier speeches of my hon. Friend the Minister.
I am also grateful for the speech of my hon. Friend the Member for Norfolk. North-West (Mr. Bellingham) and for his participation in our lengthy Committee stage. The questions of costs and accountability were fully covered by my hon. Friend the Minister earlier, and I can tell my hon. Friend that VAT is not payable on production work in the dockyards.
Our approach, involving the private sector in management while retaining the physical assets in public ownership, is innovative. It is being studied overseas, and may even have application in other areas of the United Kingdom public sector. I commend it to the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 213, Noes 171.

Division No. 124]
[11.23 pm


AYES


Ancram, Michael
Fraser, Peter (Angus East)


Arnold, Tom
Freeman, Roger


Ashby, David
Fry, Peter


Beaumont-Dark, Anthony
Galley, Roy


Bellingham, Henry
Gardiner, George (Reigate)


Best, Keith
Gardner, Sir Edward (Fylde)


Body, Sir Richard
Garel-Jones, Tristan


Boscawen, Hon Robert
Goodlad, Alastair


Bowden, Gerald (Dulwich)
Gorst, John


Brinton, Tim
Gow, Ian


Burt, Alistair
Gower, Sir Raymond


Carlisle, John (Luton N)
Grant, Sir Anthony


Clark, Sir W. (Croydon S)
Gregory, Conal


Cope, John
Griffiths, Sir Eldon


Couchman, James
Griffiths, Peter (Portsm'th N)


Cranborne, Viscount
Grist, Ian


Currie, Mrs Edwina
Ground, Patrick


Dorrell, Stephen
Hamilton, Hon A. (Epsom)


Douglas-Hamilton, Lord J.
Hamilton, Neil (Tatton)


Durant, Tony
Hampson, Dr Keith


Eyre, Sir Reginald
Hanley, Jeremy


Fairbairn, Nicholas
Hannam, John


Favell, Anthony
Hargreaves, Kenneth


Fenner, Mrs Peggy
Harris, David


Fletcher, Alexander
Harvey, Robert


Fookes, Miss Janet
Haselhurst, Alan


Forth, Eric
Hawksley, Warren


Fowler, Rt Hon Norman
Hayes, J.


Fox, Marcus
Hayhoe, Rt Hon Barney


Franks, Cecil
Heathcoat-Amory, David






Heddle, John
Prentice, Rt Hon Reg


Henderson, Barry
Price, Sir David


Hickmet, Richard
Rathbone, Tim


Hind, Kenneth
Renton, Tim


Hogg, Hon Douglas (Gr'th'm)
Rhodes James, Robert


Holland, Sir Philip (Gedling)
Rhys Williams, Sir Brandon


Holt, Richard
Ridley, Rt Hon Nicholas


Hordern, Sir Peter
Roberts, Wyn (Conwy)


Howarth, Alan (Stratf'd-on-A)
Robinson, Mark (N'port W)


Howell, Ralph (Norfolk, N)
Roe, Mrs Marion


Hubbard-Miles, Peter
Rossi, Sir Hugh


Jackson, Robert
Rowe, Andrew


Jessel, Toby
Rumbold, Mrs Angela


Jones, Gwilym (Cardiff N)
Ryder, Richard


Jones, Robert (Herts W)
Sackville, Hon Thomas


Jopling, Rt Hon Michael
Sainsbury, Hon Timothy


Joseph, Rt Hon Sir Keith
St. John-Stevas, Rt Hon N.


Kellett-Bowman, Mrs Elaine
Shaw, Giles (Pudsey)


King, Roger (B'ham N'field)
Shaw, Sir Michael (Scarb')


Knight, Greg (Derby N)
Shelton, William (Streatham)


Knight, Dame Jill (Edgbaston)
Shepherd, Colin (Hereford)


Knowles, Michael
Shepherd, Richard (Aldridge)


Lamont, Norman
Shersby, Michael


Lang, Ian
Silvester, Fred


Latham, Michael
Sims, Roger


Lee, John (Pendle)
Skeet, Sir Trevor


Leigh, Edward (Gainsbor'gh)
Smith, Tim (Beaconsfield)


Lennox-Boyd, Hon Mark
Soames, Hon Nicholas


Lester, Jim
Spencer, Derek


Lilley, Peter
Spicer, Jim (Dorset W)


Lloyd, Peter (Fareham)
Spicer, Michael (S Worcs)


Lord, Michael
Squire, Robin


Luce, Rt Hon Richard
Stanbrook, Ivor


McCrindle, Robert
Stanley, Rt Hon John


McCurley, Mrs Anna
Steen, Anthony


MacKay, Andrew (Berkshire)
Stern, Michael


MacKay, John (Argyll &amp; Bute)
Stevens, Lewis (Nuneaton)


McNair-Wilson, M. (N'bury)
Stewart, Allan (Eastwood)


McNair-Wilson, P. (New F'st)
Stewart, Andrew (Sherwood)


Madel, David
Stewart, Ian (Hertf'dshire N)


Major, John
Stokes, John


Malins, Humfrey
Sumberg, David


Marlow, Antony
Taylor, John (Solihull)


Mates, Michael
Taylor, Teddy (S'end E)


Mather, Carol
Terlezki, Stefan


Maude, Hon Francis
Thompson, Donald (Calder V)


Mawhinney, Dr Brian
Thompson, Patrick (N'ich N)


Mayhew, Sir Patrick
Thornton, Malcolm


Merchant, Piers
Thurnham, Peter


Meyer, Sir Anthony
Townend, John (Bridlington)


Miller, Hal (B'grove)
Townsend, Cyril D. (B'heath)


Mills, Iain (Meriden)
Trippier, David


Moate, Roger
Twinn, Dr Ian


Monro, Sir Hector
van Straubenzee, Sir W.


Montgomery, Sir Fergus
Viggers, Peter


Moore, Rt Hon John
Waddington, David


Morrison, Hon C. (Devizes)
Walden, George


Morrison, Hon P. (Chester)
Walker, Bill (T'side N)


Moynihan, Hon C.
Wall, Sir Patrick


Mudd, David
Waller, Gary


Neale, Gerrard
Ward, John


Nelson, Anthony
Warren, Kenneth


Newton, Tony
Watts, John


Nicholls, Patrick
Wells, Bowen (Hertford)


Norris, Steven
Wells, Sir John (Maidstone)


Onslow, Cranley
Wheeler, John


Oppenheim, Phillip
Whitfield, John


Oppenheim, Rt Hon Mrs S.
Whitney, Raymond


Ottaway, Richard
Wilkinson, John


Page, Richard (Herts SW)
Winterton, Nicholas


Parkinson, Rt Hon Cecil
Wolfson, Mark


Parris, Matthew
Wood, Timothy


Patten, Christopher (Bath)
Woodcock, Michael


Pawsey, James
Yeo, Tim


Peacock, Mrs Elizabeth



Pollock, Alexander
Tellers for the Ayes:


Porter, Barry
Mr. Michael Neubert and


Powell, William (Corby)
Mr. Gerald Malone.


Powley, John






NOES


Adams, Allen (Paisley N)
Hattersley, Rt Hon Roy


Alton, David
Haynes, Frank


Archer, Rt Hon Peter
Healey, Rt Hon Denis


Ashdown, Paddy
Hicks, Robert


Atkinson, N. (Tottenham)
Hogg, N. (C'nauld &amp; Kilsyth)


Barnett, Guy
Home Robertson, John


Beckett, Mrs Margaret
Hoyle, Douglas


Beith, A. J.
Hughes, Robert (Aberdeen N)


Bell, Stuart
Hughes, Roy (Newport East)


Benn, Rt Hon Tony
Hughes, Sean (Knowsley S)


Bennett, A. (Dent'n &amp; Red'sh)
John, Brynmor


Bermingham, Gerald
Kaufman, Rt Hon Gerald


Bidwell, Sydney
Kennedy, Charles


Blair, Anthony
Kilroy-Silk, Robert


Boothroyd, Miss Betty
Kirkwood, Archy


Boyes, Roland
Lambie, David


Bray, Dr Jeremy
Lamond, James


Brown, Gordon (D'f'mline E)
Leighton, Ronald


Brown, Hugh D. (Provan)
Lewis, Terence (Worsley)


Brown, N. (N'c'tle-u-Tyne E)
Litherland, Robert


Brown, R. (N'c'tle-u-Tyne N)
Livsey, Richard


Bruce, Malcolm
Lloyd, Tony (Stretford)


Buchan, Norman
McCartney, Hugh


Caborn, Richard
McKay, Allen (Penistone)


Callaghan, Jim (Heyw'd &amp; M)
McKelvey, William


Campbell, Ian
McNamara, Kevin


Campbell-Savours, Dale
McTaggart, Robert


Canavan, Dennis
Madden, Max


Carlile, Alexander (Montg'y)
Marek, Dr John


Cartwright, John
Marshall, David (Shettleston)


Clark, Dr David (S Shields)
Martin, Michael


Clarke, Thomas
Maxton, John


Clay, Robert
Maynard, Miss Joan


Clelland, David Gordon
Meacher, Michael


Clwyd, Mrs Ann
Michie, William


Cocks, Rt Hon M. (Bristol S)
Mikardo, Ian


Cohen, Harry
Millan, Rt Hon Bruce


Cook, Frank (Stockton North)
Miller, Dr M. S. (E Kilbride)


Corbett, Robin
Mitchell, Austin (G't Grimsby)


Corbyn, Jeremy
Morris, Rt Hon A. (W'shawe)


Craigen, J. M.
Morris, Rt Hon J. (Aberavon)


Crowther, Stan
Nellist, David


Cunliffe, Lawrence
O'Neill, Martin


Dalyell, Tam
Owen, Rt Hon Dr David


Davies, Rt Hon Denzil (L'lli)
Park, George


Davies, Ronald (Caerphilly)
Parry, Robert


Davis, Terry (B'ham, H'ge H'l)
Patchett, Terry


Deakins, Eric
Pavitt, Laurie


Dixon, Donald
Pendry, Tom


Dormand, Jack
Penhaligon, David


Douglas, Dick
Pike, Peter


Dubs, Alfred
Powell, Raymond (Ogmore)


Duffy, A. E. P.
Prescott, John


Eadie, Alex
Radice, Giles


Eastham, Ken
Randall, Stuart


Evans, John (St. Helens N)
Redmond, Martin


Ewing, Harry
Rees, Rt Hon Peter (Dover)


Fatchett, Derek
Richardson, Ms Jo


Faulds, Andrew
Roberts, Allan (Bootle)


Field, Frank (Birkenhead)
Robertson, George


Fields, T. (L'pool Broad Gn)
Robinson, G. (Coventry NW)


Fisher, Mark
Rogers, Allan


Flannery, Martin
Rooker, J. W.


Foot, Rt Hon Michael
Ross, Ernest (Dundee W)


Forrester, John
Sedgemore, Brian


Foster, Derek
Sheerman, Barry


Foulkes, George
Sheldon, Rt Hon R.


Fraser, J. (Norwood)
Shore, Rt Hon Peter


Freeson, Rt Hon Reginald
Short, Ms Clare (Ladywood)


George, Bruce
Short, Mrs R.(W'hampt'n NE)


Gilbert, Rt Hon Dr John
Silkin, Rt Hon J.


Godman, Dr Norman
Skinner, Dennis


Golding, John
Smith, Rt Hon J. (M'ds E)


Gould, Bryan
Snape, Peter


Hamilton, James (M'well N)
Soley, Clive


Hamilton, W. W. (Fife Central)
Stott, Roger


Hancock, Michael
Strang, Gavin


Harman, Ms Harriet
Thomas, Dafydd (Merioneth)


Hart, Rt Hon Dame Judith
Thomas, Dr R. (Carmarthen)






Thompson, J. (Wansbeck)
Wigley, Dafydd


Thorne, Stan (Preston)
Wilson, Gordon


Tinn, James
Winnick, David


Torney, Tom
Young, David (Bolton SE)


Wainwright, R.



Wallace, James
Tellers for the Noes:


Wardell, Gareth (Gower)
Mr. John McWilliam and


Wareing, Robert
Mr. Chris Smith.


White, James

Question accordingly agreed to.

Bill read the Third time, and passed.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 80(5) (Standing Committees on European Documents.):—

SPECIFIC TRAINING FOR GENERAL MEDICAL PRACTICE

That this House takes note of European Community Document No. 11387/84, a proposal for a directive on making specific training for general medical practice mandatory in all member states of the Community; notes that the United Kingdom already has a mandatory vocational training scheme lasting three years for doctors wishing to establish themselves as principals in general medical practice in the National Health Service; and welcomes the prospect of similar mandatory training schemes lasting a minimum of two years being established throughout the European Community.—[Mr. Maude.]

Question agreed to.

OUTER SPACE BILL [LORDS]

Order for Second Reading read.

Motion made, and Question put forthwith, pursuant to Standing Order No. 69(6) (Second reading committees.)

That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills.)

SCOTTISH GRAND COMMITTEE

Ordered,
That, in the course of its consideration of the matter of the development of the proposals for Scotland in the Green Paper on "Paying for Local Government", the Scottish Grand Committee may meet in Edinburgh on Monday 28th April at half-past Ten o'clock.—[Mr. Maude.]

EDUCATION, SCIENCE AND ARTS

Ordered,
That Mr. Clement Freud be discharged from the Education, Science and Arts Committee and Mr. David Evennett be added.
—[Mr. Fox, on behalf of the Committee of Selection.]

SOCIAL SERVICES

Ordered,
That Mrs. Edwina Currie be discharged from the Social Services Committee and Mr. John Powley be added. —[Mr. Fox, on behalf of the Committee of Selection.]

ENVIRONMENT

Ordered,
That Mr. David Alton be discharged from the Environment Committee. — [Mr. Fox, on behalf of the Committee of Selection.]

AGRICULTURE

Ordered,
That Mr. Albert McQuarrie be discharged from the Agriculture Committee and Mr. John Carlisle and Mr. Paul Marland be added.—[Mr. Fox, on behalf of the Committee of Selection.]

PETITION

Social Security Reform

Mr. Archy Kirkwood: I seek the permission of the House to present a petition in relation to proposals originally published by the Government in December in the White Paper as a consequence of the social security reviews undertaken by the Secretary of State for Social Services.
The petition has garnered 32,641 signatures since that time, across the length and breadth of the four kingdoms. The petition is addressed to the proposals contained in the White Paper on reform of social security, which will lead to millions of needy people losing benefits. They will seriously affect pensioners, women, young people, the unemployed and those with exceptional needs such as the chronically sick and disabled.
The petition concludes:
Wherefore your petitioners pray that your honourable House do not proceed with legislation arising from the proposals set out in the White Paper on the reform of social security.
I beg to present the petition.

To lie upon the Table.

Huddersfield School of Architecture

Motion made and Question proposed, That this House do now adjourn.—[Mr. Maude.]

Mr. Barry Sheerman: I am grateful for the privilege and opportunity to introduce the subject of the Huddersfield polytechnic school of architecture by way of an adjournment debate.
This is an appropriate but sad day on which to have the debate. Many polytechnics up and down the country have heard today of further cuts announced by the Government and the National Advisory Body for Public Sector Higher Education. This will affect educational opportunities in our country.
In March 1986, the Secretary of State for Education and Science announced his provisional decision to stop recruitment of students to the undergraduate BA architecture degree and postgraduate diploma in architecture courses at the Huddersfield polytechnic school of architecture, with effect from September 1986. The reason for the decision would make a suitable subject for a doctoral thesis for any student of modern Government processes who wished to illuminate how Government Departments should not assess evidence and make decisions.
The Department of Education and Science made it clear early in the 1980s that it wanted cuts in architectural education. In due course NAB and the University Grants Committee set up a transbinary architecture group, which was otherwise known as the Esher Committee. Its recommendations were considered further by the architectural intake working party AIWP. These are complex acronyms, but I hope that the House will bear with me.
The result was a recommendation that six schools of architecture should be lost to the country either by closure or merger. Since then, four have been deleted from the list, and two remain: Huddersfield and the North-East London polytechnic. At present, both schools are listed for closure.
To make sense of the proposals, we need to consider some history, if the House will bear with me. I remind the House that there are three weeks for appeal against the preliminary decision for closure. There have been three weeks from 11 March to appeal against the preliminary decision on closure. Hon. Members therefore have good reason to appeal on an all-party basis to the Minister to think again before an irrevocable decision is made.
It is important to consider the criteria on which Huddersfield is said to have been judged and failed—location, size, quality and cognate courses. On no reasonable basis can one say that Huddersfield polytechnic school of architecture has failed any of those criteria. In terms of location, the arguments against Huddersfield are the same as those against, for example, Manchester, Glasgow, Liverpool or Edinburgh.
A target of 150 students and 15 staff has been recommended. Huddersfielcl has 130 students on degree courses and, unlike other schools of architecture, another 70 students taking the higher national diploma for architectural technicians— 200 students in total. Also, Huddersfield has a full-time equivalent of 20 staff. In the


university sector, six departments have nowhere near as many—for example, Cambridge university, with 110 such students, is much smaller.
In terms of quality, degree and honours degree status was granted by the Council for National Academic Awards in 1983. Unlike many other schools in polytechnics which have lost the ability to give an honours degree or have not yet achieved that status, in 1985 the Royal Institute of British Architects gave the maximum recognition for the longest period in its power to courses at Huddersfield polytechnic. Notes were made on the quality of the courses. Attention has been drawn to aspects of the school's work where the Government wanted to encourage study — for example, advanced work in computer applications in architecture.
In terms of cognate courses, it is true that professional architects and technicians are educated together at the Huddersfield school, which must surely be a plus. Related courses in art, design and building are run in parallel with architectural courses. The teaching staff at the polytechnic are from several departments. The architectural department is in the school of engineering. The criteria in the cognate disciplines are a model for other schools of architecture.
The decision against the Huddersfield school and NELP was the result of a long process. Before coming to a final decision, Ministers must weigh the closure of Huddersfield and NELP against the original policy objectives for pursuing cuts in architecture. We believe that those policies were wrong-headed. The thrust of the closures is to reduce expenditure on architectural education, to stabilise the size of the architectural profession, to prevent the unemployment of graduates from these schools and to protect the profession's income levels. Those criteria are hopeless. Paring the system down to two schools of architecture will not result in significant overall savings. If the Government had taken on the profession more boldly and had cut architectural education back from seven to five years, they might have done something more sensible.
Better alternatives exist in terms of reducing costs. We now know that the statistical basis for the Esher report's diagnosis of the problems was faulty. The architectural profession, rather than being stabilised, will be reduced by a third.
The report also failed to look at the impact of European Community regulations on the United Kingdom. In the United Kingdom, 95 per cent. of our architecture graduates get jobs; indeed, 100 per cent. of the graduates of the Huddersfield school get jobs in architecture. In line with the European influence on our lives, European graduates from any part of the EEC will be able to come to practise in Britain. Last year, almost 100 per cent. of the graduates of the two schools of architecture in Dublin were unemployed. If we do not have our own supply of architects, those graduates will be able to seek employment in Britain.
This policy is hardly in line with the deregulation philosophy for trades and professions to which the Government are supposed to be committed. We need more architects. Yesterday I telephoned eight architects in Yorkshire, and all were looking for architectural staff but could not find them. In West Yorkshire, Yorkshire and

Humberside we desperately need more architects to rebuild the infrastructure—private and public—because it is in such a desperate state.

Mr. Richard Wainwright: In pursuance of the point which the hon. Gentleman has reached, does he agree that in West Yorkshire, in Huddersfield and in the architectural profession generally it has been well noted that in all these recent inquiries into the Huddersfield school of architecture there were only two at which the polytechnic authorities had a fair and proper chance to set forth the record of the school and its plans? In those two cases, the reputation of the school was fully vindicated and both the National Advisory Committee and RIBA have endorsed the claims for the Huddersfield polytechnic school to continue.

Mr. Sheerman: The hon. Gentleman is absolutely right. Whenever the school got the opportunity to put its case to an impartial group of assessors, their assessment of the quality of the school and its importance were in favour of the continuation of the school.
Anyone who looks at the decision-making process with regard to schools of architecture will be amazed. There has been a shambles of decision-making. None of the rules of natural justice has applied in this case. The outcome borders on the irrational. There has been no sensible and fair assessment of the general objectives of Government policy in relation to schools of architecture or the fair application of the criteria originally laid down.
What makes me most cross is that the staff of the department and the students have been appallingly treated. Many young people's aspirations to become architects will be dashed by the Government's decision. The Government have given the money for next year's courses but they have said that the first-year course cannot recruit in 1986. That means that young people in Huddersfield will not have a chance to become architects. Their futures have been ruined by the dilly-dallying, shilly-shallying attitude of the Secretary of State. It is a cruel thing to do to young people on the threshold of a career.
Irrationality breeds a lack of confidence in the administration and in its decision-making. It forces institutions, faced by that type of irrational behaviour, to go in for political in-fighting and to pull weight wherever they can. That is the only reason I can find for the fact that Huddersfield and the North-East London polytechnic are the only schools of architecture to be closed. It is not on the basis of qualtiy or of any rational criteria but because they did not have friends at court or political muscle which could pull behind the scenes to keep them in business.
The House should hear the case for the Huddersfield polytechnic. The Minister still has a chance to reverse the decision and to make sure that a thriving school that does so much for the community and the nation will succeed in future.

Mr. John Whitfield: I am grateful to the hon. Member for Huddersfield (Mr. Sheerman) for permitting me a short space of time before my hon. Friend the Under-Secretary replies to back up the majority of the points that he has made. The hon. Gentleman packed many facts into his speech and I am sure that my hon. Friend will have taken those fully on board.
The one point that I want to make is that, although the Government, rightly, are seriously examining the number


of polytechnic places which are, or ought be be, properly available throughout Britain, in the future of the Huddersfield school of architecture a rather curious process of elimination has been embarked upon. That is illustrated most clearly by the fact that the Huddersfield school of architecture has recently been granted the right to award honours degrees in architecture whereas the Leeds school of architecture, which is only just down the road for those who are not familiar with our part of the world, has recently lost that right.
My hon. Friend may rightly say that perhaps there are too many schools of architecture in the country—there are two schools in Manchester and Liverpool, and one in Huddersfield, Leeds and Hull in our part of the world. It is extraordinary, however, that of those schools the Huddersfield school of architecture should, within a short space of time of being granted the right to award honours degrees, be faced with closure.

The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden): I am grateful to the hon. Member for Huddersfield (Mr. Sheerman) for bringing to the attention of the House his concern over the provisional decision by my right hon. Friend the Secretary of State for Education and Science to direct that the part I course in architecture at Huddersfield polytechnic should cease to be provided. This provisional decision was relayed to the polytechnic and its maintaining authority in a letter from the Department dated 7 March 1986.
The hon. Gentleman talked about the complexities of a doctoral thesis, but I want to stress that one man's doctoral thesis is another man's scrupulously careful procedures. It is important that hon. Members fully understand the background from which this provisional conclusion has emerged.
The number of registered architects has risen over the 12 years from 1973 to 1985 by no less than 21 per cent., leading inevitably to under-employment within the profession and a resultant fall in real earnings. The quarterly statistics produced by the professional body, the Royal Institute of British Architects, show that to be the case. At the same time, as I remind hon. Members, the education and training requirement for architects prior to registration is seven years —I am glad that the hon. Gentleman alluded to that—of which five are spent in full-time study, each of them grant-aided in respect of tuition fees and maintenance from public funds. That means, if I may borrow a rather telling phrase from the Financial Times, that
three architectural students take up as much in grant as five ordinary undergraduates, a fact not well appreciated by the general public.
It was against a background of excess supply that the transbinary architecture group, chaired by Lord Esher, and so known as the Esher group, was established in 1983, under the aegis of the National Advisory Body for Public Sector Higher Education and the University Grants Committee. The group reported in September 1984. The central recommendation of the Esher group was that policy should be directed to stabilise the size of the profession at the level it would reach by 1990, when the 1984 student intakes had qualified. Esher forecast that this would give a profession in the 1990s of about 31,000 architects. The fact is that since publication of the report numbers have

continued to increase at a rate that was underestimated by Esher, so that the total number of architects on the statutory register maintained by the Architects Registration Council of the United Kingdom already stood at 29,692 at 31 December 1985.
The conclusions of the Esher group on the need to stabilise the size of the profession by limiting intakes to training were accepted by both the National Advisory Body and by the University Grants Committee. They have also been accepted by my right hon. Friend the Secretary of State. Following acceptance by the NAB and the UGC of the central recommendations of the Esher report, a joint architecture intakes working party was established to consider how the reductions recommended by Esher might be implemented and to advise its parent bodies accordingly. The working party reported in August 1985.
When it considered the AIWP's proposals, the NAB board accepted the recommendation that the Huddersfield and NELP school should be closed. Subsequently, the NAB committee accepted the board's advice in respect of NELP, but recommended that an intake be maintained in 1986 at Huddersfield. It resolved, however, to review intakes at Huddersfield in the context of the NAB's 1987–88 planning exercise in the light of further consideration of the factual material. In a statement on 20 December 1985, in response to NAB's advice about academic provision and the distribution of the advance further education pool in 1986–87—I apologise for all this jargon, but I think that most hon. Members are familiar with it—my right hon. Friend the Secretary of State indicated that he could not accept the NAB's advice that the reduction in intakes to public sector part architecture courses should be accomplished solely by the closure of the NELP school. Instead, he said that he would review the position over one or two months. That is another example of the extraordinary care and scrupulousness with which the provisional decisions were taken.
In the light of that further review, my right hon. Friend reached his provisional decision that there should be no intake to the part I course at Huddersfield in 1986
The preparatory work for the review was undertaken by officials of my Department. Corrections and clarifications of the factual information before the AIWP and NAB were sought and meetings arranged between officials and representatives of both Huddersfield and NELP. Thus an opportunity was afforded to both polytechnics to comment on factual and other aspects of the reviews undertaken successively by the Esher group, the AIWP and the NAB. Thereafter, at the request of the Department, further information was submitted by both institutions. Officials reported the results of this work to my right hon. Friend.

Mr. Andrew F. Bennett: Can the Minister confirm that provisional offers have been made to students for the start of the autumn term of the 1986 course? Is it not grossly unfair to snatch away those provisional offers at this stage?

Mr. Walden: Not for the first time, the hon. Gentleman is dramatising the situation. I am describing how carefully and considerately we approached an admittg,dly difficult question, which will inevitably—I sympathise with the spirit of what the hon. Gentleman says —involve some discomfort, to put it mildly, to some students.
In the light of the work undertaken by officials, my right hon. Friend noted that the AIWP report had described


the criteria adopted for the purposes of its work but had not indicated how the working party had applied those criteria to produce its recommendations involving institutional closures. As a first step, therefore, he considered whether the working party had acted reasonably in its general approach in selecting the criteria for its review and in seeking evidence from those it had approached. In the light of the available evidence, he was satisfied as to the reasonableness of the AIWP's general approach. Thereafter, he considered whether on the basis of the evidence before the working party, amended on points of fact as necessary, it would be reasonable for him to come to the same conclusion, namely, that the part I courses in architecture at Huddersfield and NELP should have zero intakes in 1986. He carefully reviewed the sources of information used by the working party and NAB, together with the corrections and clarifications reported to him by officials.
The AIWP has identified four criteria as relevant to its consideration of institutional allocations. As the hon. Member for Huddersfield said, these were size, location, quality and relationship to cognate disciplines. In practice, a fifth criterion must be added, since the working party received evidence on the resources available to architecture schools as one factor underpinning the quality of existing courses and their potential for future development and expansion.
With regard to school size, the first criterion, my right hon. Friend noted that the full-time equivalent numbers in 1984–85 undertaking architectural training at Huddersfield polytechnic were the lowest of all public sector schools regardless of whether allowance was made for overseas and full-cost students. As for location, the second criterion, Huddersfield's school is situated in one of the main concentrations of provision identified by the Esher report. In the light of provision accessible elsewhere in the region, the role of the Huddersfield school in relation to continuing professional development was also not regarded by my right hon. Friend as sufficient to exclude it from further consideration.
Satisfied that it was not unreasonable on the criteria of size and location to consider the cessation of intakes to the part I course at Huddersfield, my right hon. Friend considered the more judgmental criteria of resources, quality of work and relationship with cognate disciplines. It was noted that the polytechnic had challenged some of the judgments made by Her Majesty's Inspectorate with regard to resources available to the school, but it was considered, in any event, that the school's resources did not emerge as superior to those available to the other schools located in the area.
As to quality and relationship to cognate courses, my right hon. Friend had close regard to the advice of HMI that while all public sector architecture schools were clearly above an acceptable threshold of quality, there were perceptible differences between them which facilitated the identification, within that range, of those schools which were above and those which were below average quality. My right hon. Friend concluded, in the light of HMI advice — which remained as given to AIWP and NAB — that closure of the school at Huddersfield in the context of an overall reduction in intakes would not represent a significant loss of quality from architectural training.

Mr. Sheerman: Is it not a fact that HMI has never sent an inspector who specialises in architecture to Huddersfield polytechnic? There has been no proper assessment at any time by HMI of the quality of that school.

Mr. Walden: The hon. Gentleman is casting aspersions on the work of HMI, as I understand it. May I reiterate what I said earlier on numerous occasions throughout my speech? My right hon. Friend the Secretary of State made a careful review of all the steps taken before reaching his provisional decision. I think that it is important, and that it will be helpful to all hon. Members if I get the Government's view on record.
My right hon. Friend also took account of factual material bearing on quality and relationship to cognate disciplines, to which attention had been drawn by representatives of the polytechnic in its discussion with officials. In this context, the reported views of the validating body, the CNAA, and the professional body, RIBA, were noted. In the judgment of my right hon. Friend, however, these did not by themselves render unreasonable the identification of the school at Huddersfield polytechnic for a zero intake to its part I course in 1986.
It was against that background that my right hon. Friend took his provisional decision that there should be no intakes to the part 1 course at Huddersfield in 1986. I must however re-emphasise, as I have on several occasions during my speech, the essentially provisional nature of the decision, the basis of which was set out in the Department's letter of 7 March to the polytechnic's maintaining authority, which also conveyed an invitation to make further representations in the light of its contents.
I am grateful to my hon. Friend the Member for Dewsbury (Mr. Whitfield) for attending the debate, because the broader hearing the Government case has the better we like it. I can assure the hon. Member for Huddersfield, my hon. Friend the Member for Dewsbury and other hon. Members that my right hon. Friend will give careful consideration to whatever representations are made by the deputation that he will shortly receive from the polytechnic and the maintaining authority. He will proceed to a final decision only in the light of those representations.
It was valuable for me and for the Government to hear the views of the hon. Member for Huddersfield, and I sympathise with his concern and with the concerns of his constituents. I know that other hon. Members also have an indirect but vital interest in this matter and I was grateful to hear their comments tonight. I hope that I have stressed sufficiently in my remarks that the Government have adopted a cautious approach to this complicated problem. The European dimension raised by the hon. Member for Huddersfield introduces a further complexity into this matter.

Mrs. Elizabeth Peacock: Will my hon. Friend note that there are many students with an offer from Huddersfield who do not know where they stand at present? Will he assure us that a decision will be taken reasonably quickly so that these young people will know whether or not they have a place at Huddersfield?

Mr. Walden: I appreciate the element of uncertainty which my hon. Friend has raised and I hope that in my speech I have stressed that inevitably a balance must be


struck between the need for a reasonably prompt decision on the one hand, and on the other the equally pressing need for careful review of this extremely complicated situation.
I was about to conclude my remarks by mentioning the European dimension raised by the hon. Member for Huddersfield. In this connection, it has been argued that the new directive for freer movement will facilitate a net outflow of registered architects to Europe and may therefore have the effect of reducing the number of practising architects in the United Kingdom. On the other

hand, the issue of the EC directive was discussed by both the NAB board and committee, which foresaw an influx of European-trained architects into the United Kingdom, which would, of course, exacerbate the over-provision of training places already identified by the Esher group.

The Question having been proposed after Ten o'clock on Tuesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Six minutes past Twelve o'clock.